Preamble

The House met at half-past Two o'clock

PRAYERS

[MR. SPEAKER in the Chair]

Oral Answers to Questions — EDUCATION AND SCIENCE

University Staff (Redundancy Compensation)

Mr. Cryer: asked the Secretary of State for Education and Science what representations he has received regarding redundancies of academic and technical staff in universities since his answer of 25 January, Official Report, c. 275; and if he will make a statement.

The Secretary of State for Education and Science (Sir Keith Joseph): The redundancy compensation for university academic staff which I announced on 25 January has been generally welcomed.

Mr. Cryer: Is the Secretary of State aware that there is the wider issue that Government cuts generally, and particularly at Bradford university, threaten universities as institutions and academically? Is he further aware that the proposed redundancies in Bradford will increase unemployment in an area that already has a high level of unemployment? Does he not realise that his vaunted claim to belong to a party that increases freedom of choice is the reverse of the truth, because, by cutting back on universities such as Bradford——

Mr. Speaker: Order. The hon. Gentleman is now making a speech.

Mr. Cryer: I am just finishing, Mr. Speaker. The right hon. Gentleman is making——

Mr. Speaker: Order. The hon. Gentleman is continuing far too long for aquestion.

Sir Keith Joseph: It is open to all universities to consult the University Grants Committee on the effect of its proposals.

Mr. Geoffrey Robinson: Will the Secretary of State take more seriously the effects of his cuts on universities, such as Aston in the West Midlands? Will he be more forthcoming in his support for the science parks at Aston and Warwick universities than he was yesterday at the launch of the Warwick one? Is there not some way of giving moral and financial Government support to these ventures?

Sir Keith Joseph: The Government already provide enormous amounts of taxpayers' money to the universities. It does not seem sensible or possible for the Government to protect all sectors of public spending when there is an urgent need to abate the rise in public spending.

Mr. Nicholas Winterton: Is my right hon. Friend aware that although the Government are seeking to advance technology, some of the cuts in higher education are having an adverse effect on the universities of Bradford, Leeds and Manchester in the departments which concentrate on textiles? This could have a detrimental effect on the training of high technology experts for an industry which needs these skills.

Sir Keith Joseph: As my hon. Friend will know, Ministers do not presume to allocate money between institutions; they leave that to the UGC, to which individual institutions should put forward their views.

Mr. Whitehead: Is the Secretary of State proud of the fact that this week in The Times Higher Education Supplement he and his colleagues have been described as "The new yahoos, " presiding over a system in which £200 million is being paid out to sack university teachers, whom the universities do not wish to get rid of, for whom there is a demand and whose product is highly esteemed?

Sir Keith Joseph: Name calling does not solve the problem of reducing inflation and unemployment. In the Government's view, that depends on a proper balance between public spending and private investment.

Mr. Cryer: On a point of order, Mr. Speaker. In view of the Secretary of State's inadequate and evasive reply, I give notice that I shall seek to raise the matter on the Adjournment at the earliest opportunity.

Maintained Voluntary Schools

Mr. Montgomery: asked the Secretary of State for Education and Science whether he has any plans to alter the status of the maintained voluntary schools or the Church's role in many of these schools; and if he will make a statement.

The Under-Secretary of State for Education and Science (Dr. Rhodes Boyson): My right hon. Friend has no plans to alter the status of maintained voluntary schools or the Church's role in them. The Government fully support the very valuable part that voluntary schools play in our education system. They provide what many parents want for their children—education in a maintained school, but in an atmosphere that reflects their faith.

Mr. Montgomery: Does my hon. Friend agree that that answer is in marked contrast to the anti-Church and anti-voluntary school policies being pursued by the Labour Party?

Dr. Boyson: I take my hon. Friend's point—[HON. MEMBERS: "Rubbish."] It is not rubbish. The first draft of the Labour Party's election campaign for the Greater London Council last year contained the following:
That no child should be educationally segregated by virtue of his or her sex, religious, ethnic or socio-economic status.
If children are not to be separated by religion, there will be no voluntary schools. That was cut out later, because of a great outcry, but it was there at the beginning.

Mr. Hardy: Has there ever been a two-year period when so many voluntary schools have been closed?

Dr. Boyson: I do not know of any two-year period when there has been such a fall in the birth rate in the years before. It was no desire of this Government that there


should have been a fall in the birth rate five years ago. It must have reflected the policies of the Labour Government of that time.

Sir William van Straubenzee: I fully endorse my hon. Friend's confidence in such schools, but should not the long-term objective be to work towards nondenominational schools, perhaps with some restructuring of the arrangements between the Churches and the State?

Dr. Boyson: That is an interesting point, and it is not the first time that my hon. Friend has raised it. Obviously, the Government support denominational schools where parents demand them. Similarly, we consider sympathetically any requests for joint-denominational schools.

Mr. Kinnock: Does the Minister recognise and register the fact that there is no anti-Church or anti-voluntary school sentiment in the Labour Party? On the contrary, the Opposition wish to see an improvement in the standards of education and provision for the liberty of every individual in Britain.

Dr. Boyson: I am sure that all hon. Members will welcome that statement. At the same time, there is a suspicion that bubbling at the bottom of the Labour Party is an anti-voluntary school complex. The Times printed a letter last week from a Councillor Hilary Benn, who I believe is a member of the Labour Party, stating:
The case against any extension of voluntary-aided denominational education is overwhelming.

Student Union Financing

Mr. Nicholas Winterton: asked the Secretary of State for Education and Science whether, consequential upon his answer of 1 December, Official Report, c. 130, he has reached a decision on the difficulties which arise from the present system of student union financing; and if he will make a statement.

Mr. Eggar: asked the Secretary of State for Education and Science whether, consequential upon his answer of 1 December, Official Report, c. 130, he has any further statement to make on the present system of student union financing.

The Under-Secretary of State for Education and Science (Mr. William Waldegrave): A change in the method by which student unions are financed is not one of the issues we are currently considering. That would be premature. The current arrangements came into effect only in the current academic year.

Mr. Winterton: Does my hon. Friend agree that compulsory membership of student unions is alien to Conservative philosophy? Does not the case of Paul Soden epitomise the current unsatisfactory position? Will he give sympathetic consideration to the research being carried out by the Federation of Conservative Students into making membership of student unions voluntary?

Mr. Waldegrave: My hon. Friend and I have been corresponding on this matter. Since subscriptions to student unions were abolished in favour of funding from the recurrent grants for institutions, the problem does not arise in its traditional sense. However, I shall continue to consider the matter.

Mr. Ward: Does my hon. Friend realise that his reply will be met with less than satisfaction on the Government

Benches? Does he agree that we should once more consider giving the same freedom to those who either wish or do not wish to join a student union as we are proposing for any other union in Britain? Does he accept that much of the trouble caused by student unions arises because they are not answerable to those who provide their funds?

Mr. Waldegrave: I hope that my hon. Friend will agree that student unions are not comparable to industrial unions. They provide common facilities for students and, therefore, are correctly financed out of the recurrent grants for institutions. The problem does not arise in the way that my hon. Friend believes.

Mr. Eggar: rose——

Mr. Speaker: Order. I must tell the hon. Member for Enfield, North (Mr. Eggar), who has just arrived, and whose question is being answered, that any supplementary question should relate to the answer—which he did not hear.

Mr. Eggar: I understand, Mr. Speaker, and will not ask a supplementary question.

Mr. Speaker: I am glad that the hon. Gentleman is courteous enough to acknowledge my point. I shall remember that.

Careers Advice

Mr. Marlow: asked the Secretary of State for Education and Science if he intends to introduce any new proposals to improve the provision of careers advice in schools; and whether he proposes to make any changes in the training of teachers designated to have responsibility for careers advice.

Dr. Boyson: My Department has already drawn attention to the need to improve the careers advice given in schools, and will continue to do so. There is a variety of in-service training courses to help teachers in this area of their work, and we have no immediate plans for changes in these arrangements.

Mr. Marlow: Does my hon. Friend agree that with the present difficult position for youngsters contemplating leaving school, careers advice is very important, and that the Government should deploy all the resources and skills at their disposal to ensure that the best service is provided?

Dr. Boyson: I agree with my hon. Friend. During the past three years the number of teachers on one-year full-time or equivalent part-time courses in careers training has doubled. It is important that all teachers are aware of the position outside schools. They will give better advice if they have experience of life in industry.

Mr. Flannery: Does the Minister agree that although we want better careers advice, with more teachers undertaking in-service training—which requires additional financial provision—at the end of the day the Conservative Government have created a situation in which almost all youngsters are thrown on the scrap heap?

Dr. Boyson: I am sure that no hon. Member wants large-scale juvenile unemployment. Unemployment in Britain began to rise under the Labour Government, and it has also risen throughout Western Europe. Until Britain manufactures goods at the right price and quality that people want to buy, there will always be unemployment.

Mr. Haselhurst: Would not the task of giving careers guidance to youngsters at school, and guiding them over the bridge from school to work, be best given exclusively to a reconstituted careers service?

Dr. Boyson: My hon. Friend's point is interesting. Careers services provided outside schools are not under the control of my Department, but careers teachers in schools are under its control. It is important to link all aspects. It is also important to create the right atmosphere inside schools, for example, by showing films on different careers. Children should grow up realising that they must prepare for an outside world

Mr. Foster: Does the Minister realise that the amount of time that careers officers now devote to advising on the youth opportunities programme means that they must substantially reduce the amount of time that they spend in schools? There is no value in the Department issuing guidelines to head teachers and careers teachers when they are receiving such a poor service from careers officers.

Dr. Boyson: I take that point. I made inquiries about this matter this morning. The number of pupils and students interviewed in the year to September 1981 was higher than in the previous year.

Inner London Education Authority

Mr. Dobson: asked the Secretary of State for Education and Science what representations he has received about educational standards in the Inner London Education Authority.

Dr. Boyson: As I informed the hon. Member for St. Pancras, North (Mr. Stallard) on 19 January, my right hon. Friend met representatives of the Inner London Education Authority at their request. Following the publication of the Local Government Finance (No. 1) Bill, he has received more than 3, 000 letters on aspects of education in inner London, including educational standards.

Mr. Dobson: Does the Minister agree that the bulk of those representations urge the Government to give proper financial support to the Inner London Education Authority and to acknowledge that the standard of performance in inner London primary schools has risen above the national average? Will that not automatically work its way through to improved standards in secondary schools? Should not the Government stop their stupid, carping criticism of the ILEA and its teachers and give it the money to do the job?

Dr. Boyson: I am interested in the hon. Gentleman's question. The report of Her Majesty's Inspectorate on London in December 1980 praises the primary schools. However, it also makes it clear that there is not the response and achievement in relation to the resources provided that there is in other areas. The GRE for inner London is £512 million, whereas the intended expenditure, which is still being discussed, is £795 million—55 per cent. above the GRE. The GRE for inner London is already 33 per cent. higher than it would be for a similar number of pupils in the shires.

Mr. Dickens: Does the Department have any proposals to test the efficiency and effectiveness of teachers after they have passed their first year's initial training? They appear to have a licence to teach for life following that one year. Should they not be tested?

Dr. Boyson: Teachers must undergo a probationary period, whether in inner London or any other area. We are considering the length of that probationary period and the question of induction. I agree that it is essential that there should be some assessment of teachers at the end of their probationary period.

Mr. Dubs: Does the Minister agree that if the Inner London Education Authority were to reduce its expenditure to the GRE level, the effect would be a drastic fall in education standards in inner London?

Dr. Boyson: As the number of pupils who obtain five 0-levels in London is half the percentage for the rest of the country, I should hate to see a further fall. If the expenditure were reduced to £670 million, a grant would then be given by the Government. London would gain £19 for every £10 cut, because for every £10 cut a Government grant of £9 would be put in as a bonus. I am sure that that would be welcomed by most ratepayers in inner London.

Mr. Brinton: Does my hon. Friend agree that education spending has doubled during the past 20 years in real terms—probably more in inner London—but that standards in inner London, if they have risen at all, have risen minutely? Surely it is not a question of spending and resources, but of proper teaching of proper subjects.

Dr. Boyson: I agree with my hon. Friend. The HMI report of December 1980 on the subject of inner London states:
Schools have, in any case, very generous staffing, resources and funding which in HMI's view they do not always deploy wisely. There are disturbing examples of waste and inefficiency.
In other words, ILEA can save the money and still maintain or raise the standards.

Colleges of Further Education (Capacity)

Mr. Kenneth Carlisle: asked the Secretary of State for Education and Science whether colleges of further education will have sufficient spare capacity for extra students arising from the new training initiative; and whether he will make a statement.

The Under-Secretary of State for Education and Science (Mr. William Shelton): My right hon. Friend is satisfied that the spare capacity available to local education authorities generally, together with other suitable premises which might be provided with Manpower Services Commission funds, will enable expansion to take place on the scale proposed.

Mr. Carlisle: I thank my hon. Friend for that reply. Is it not wrong that some colleges of further education have to cut back this year when they will have to expand the following year to accommodate the new training initiative? Should there not be greater flexibility between the budgets of the Department of Education and Science and the Department of Employment to avoid that inconsistency?

Mr. Shelton: I know of my hon. Friend's interest in the matter. In July last year my right hon. Friend the Prime Minister made an additional £60 million available, and my right hon. Friend the Secretary of State made available a further £35 million last December to pupils who stay on. How the money is used is a matter for the local education authority.

Mr. Kinnock: Will the Under-Secretary confirm that unemployed young people who do not take advantage of the youth training scheme next year will be paid nothing, and that young people this year who, in trying to obtain educational qualifications, have to attend an institution for more than 21 hours a week also will get nothing? Will he explain to those young people, who get nothing if they stay in education and training this year and will get nothing if they refuse to stay in education and training next year, the inconsistency in the Government's policy?

Mr. Shelton: I accept that at present there are certain anomolies. However, I am delighted to tell the hon. Gentleman that there is an increase of about 10 per cent. in the number who are staying on in full-time education. I also remind him that the parents of children in full-time education receive the child benefit allowance.

Mr. R. C. Mitchell: When does the Under-Secretary propose to start consultations with technical colleges about the part that they are expected to play in the new training initiative?

Mr. Shelton: Consultations are going on all the time. Officials from the Department, in conjunction with officials from the Manpower Services Commission, are on a number of different steering groups considering how this can best be organised. Consultations are going on all the time at every level.

Medical Research Council

Mr. Whitehead: asked the Secretary of State for Education and Science to what extent, in fixing the budget of the Medical Research Council, he takes into account the provision of postgraduate medical education by universities (a) in total and (b) in London.

Mr. William Shelton: The Medical Research Council is not concerned with postgraduate professional training for medical practitioners.

Mr. Whitehead: When medical research within the universities is being calculated by the Department, what figure of lost posts in England and Wales, particularly in medical schools, is taken into account? In view of the threatened sacking of the medical school unit at the Westminster medical school, whose work on Vitamin B12 deficiencies is, literally, life-saving, can the hon. Gentleman assure us that such valuable research will be safeguarded by his Department?

Mr. Shelton: That is not a matter for my Department. It is a matter for the Department of Health and Social Security, which is responsible for all medical training. The Medical Research Council is not responsible for medical training. It is responsible for research training and biomedical sciences. The people who do that do not usually have medical degrees, and they study in the science departments of universities.

Mr. Carter-Jones: In allocating resources, whether in or out of London, will the Under-Secretary ensure that resources are made available to those parts of the economy with the greatest needs—the elderly, the incontinent, arthritics, prevention, and rehabilitation—and not so much to esoteric research, which yields little for our people?

Mr. Shelton: I am sure that my right hon. Friend the Secretary of State for Social Services will take notice of what the hon. Gentleman said.

State Schools

Mr. Stokes: asked the Secretary of State for Education and Science whether he is satisfied with the standard of education in State schools in England.

Mr. Forman: asked the Secretary of State for Education and Science if he will make a statement setting out the Government's policy for encouraging the achievement of higher standards in both primary and secondary education.

Dr. Mawhinney: asked the Secretary of State for Education and Science if he is satisfied with the standard of educational attainments in secondary schools.

Sir Keith Joseph: There is always room for improvement in both primary and secondary schools. Our educational policies are directed towards that end.

Mr. Stokes: Has my right hon. Friend seen recent reports that many pupils cannot do simple sums, cannot read a train timetable, and do not even know the meaning of the word "inflation"? Does he therefore think that a return to the teaching of the three Rs in schools might be preferable to some of the more modern, progressive and trendy systems of education?

Sir Keith Joseph: I am sure that my hon. Friend is right to be worried about the revelations in the Cockcroft committee's report. Most of its recommendations are addressed to teachers. I hope that those recommendations will be widely read. The Government will consider what falls to them in that connection and what they can do about it.

Mr. Forman: I was interested to hear my right hon. Friend's brief statement in reply to that question. Will he take time later, in the Official Report and elsewhere, to make a fuller statement in answer to my question, which has been linked with question 11, and emphasise two matters which are important for standards in education: first, the importance of teaching practice in the context of teacher training; and, secondly, greater emphasis in his policy on absolute rather than relative standards in public examinations?

Sir Keith Joseph: I accept all that my hon. Friend said as ingredients in the progress that we all want to make towards more effective education. I also emphasise the importance of increased parental choice, which my predecessor introduced in legislation which comes into effect this autumn, the importance of in-service training, and, above all, the importance of the quality of head teachers and teachers.

Dr. Mawhinney: Does my right hon. Friend agree that staff-student ratios are better now than they were under the Labour Government? Does he also agree that education standards might be put at risk if, in making the necessary reductions in teacher posts to keep pace with falling rolls, consideration were not given to the fact that children are taught in discrete class units and that, therefore, global comparability numbers are not necessarily the right ones?

Sir Keith Joseph: I thoroughly agree. The pupil-teacher ratio is at a record level, yet there are diseconomies in the falling school rolls.

Mr. Newens: Is the right hon. Gentleman aware that the savage reductions in the rate support grant, which affect


local education authorities—including Conservative-controlled authorities, such as Essex—mean that cuts are being made in basic necessities? That will inevitably lead to a drop in standards. Does the right hon. Gentleman not realise that since the war the biggest threat to education standards has come from the measures pursued by the Government?

Sir Keith Joseph: No, Sir. Education authorities have a difficult set of problems to solve, but in the interests of the country, of teachers and of pupils we must rectify the balance between public expenditure and the economy as a whole.

Mr. Kinnock: How can the Secretary of State lay claim to a belief that he will raise educational achievements when he is presiding over schools that have £100 million less in real terms to spend this year on essential books and teaching materials than in 1978–79? In response to the question asked by the hon. Member for Peterborough (Dr. Mawhinney), will the right hon. Gentleman tell us what action he will take to ensure that levels of provision are raised in order to raise levels of attainment? Does the right hon. Gentleman really believe that less means better?

Sir Keith Joseph: I do not believe that less means better; nor do I believe that more necessarily means better. The Government have provided money so that local education authorities can spend an extra £20 million this year on books and equipment if the pay and price assumptions built into the money made available are validated.

Mr. Eggar: If we are to improve standards, is it not vital that it should be made easier to remove poor teachers?

Sir Keith Joseph: My hon. Friend has touched on an important factor that I am due to discuss before long with education authorities.

Mr. Beith: What do Her Majesty's inspectors of education consider has been the impact of cuts on standards?

Sir Keith Joseph: The hon. Gentleman and I must await the report's completion.

Violence (Pupils and Parents)

Mr. Greenway: asked the Secretary of State for Education and Science if he will issue a circular to schools giving guidance to local education authorities on methods of dealing with violent pupils or parents.

Sir Keith Joseph: I deplore the use of violence and I stand ready to give my support to local education authorities and schools in their efforts to curb it. I have no evidence at present that local education authorities look to me for detailed guidance.

Mr. Greenway: Has my right hon. Friend seen the second report of the Select Committee on Education, Science and Arts, which was issued this morning? The fourth recommendation states that the head, staff and the governors should have freedom to determine the disciplinary policy and practice of a school. Does my right hon. Friend agree that in that way discipline may be returned to individual schools and that will strengthen a school's individuality and the way in which it caters for the needs of particular children?

Sir Keith Joseph: I have not yet seen the report, but I shall study its recommendations and analysis with great interest.

Mr. Adley: On the assumption that my right hon. Friend is familiar with the contents of the Criminal Justice Bill, will he take an early opportunity to discuss its implications with education authorities and particularly the emphasis placed on parents being responsible for their children's criminal activities? Will he ensure that that information is disseminated as widely as possible?

Sir Keith Joseph: I cannot give that assurance, but I can undertake to inform myself about the implications of my hon. Friend's suggestion.

Handicapped Pupils

Mr. Edwin Wainwright: asked the Secretary of State for Education and Science what is the total number of pupils in various categories of handicap in England and Wales at the latest available date; and how many are receiving their education in special classes.

Dr. Boyson: As the answer contains a number of figures, I shall publish the information for England in the Official Report. My right hon. Friend the Secretary of State for Wales is responsibile for information relating to pupils in Wales.

Mr. Wainwright: Does the right hon. Gentleman agree that, compared with other developed countries, Britain is almost at the bottom of the education league? Does he not realise that the children who need special education and tuition are those who will suffer most? When will he restore the education of those unfortunate children who require special education to a reasonable standard?

Dr. Boyson: The hon. Gentleman has long been concerned about those children who require special education. Indeed, 18 months ago he spoke on the Second Reading of the Education Bill. The money for special education has remained static, while numbers have fallen. That means that more should be spent per pupil than, before and the hon. Gentleman will no doubt be glad to hear that.

Mr. Alton: Is the number of peripatetic teachers who deal with handicapped children in their homes being maintained or are local education authorities cutting back on their numbers?

Dr. Boyson: I cannot answer that straight away. If the hon. Gentleman wants an answer I shall send him a letter with that information, which I should also like to know.

Mr. Marlow: Will my hon. Friend ensure that all would-be teachers are trained in basic mathematics so that they will realise that if they do not accept the 3.4 per cent. pay offer there will be fewer teachers?

Dr. Boyson: My hon. Friend has asked a two-pronged question. No one aged 18 is enrolled in a college of education unless he has O-level English and maths. In 1977, 37 per cent. were enrolled without O-level maths. That shows that there has been an improvement and that teachers may understand the figure that my hon. Friend has mentioned.

Mr. Foster: Has the Minister seen the report published only this week about the appalling difficulties that


physically handicapped 16 to 19-year-olds face, both at work and in education? Does he agree that the services provided for 16 to 19-year-olds in further education are completely inadequate? If so, what will he do about it?

Dr. Boyson: I have not read that report and the hon. Gentleman has an advantage over me. However, I shall consider it. I do not agree that provision is totally inadequate. We should all like to see improvements and the economic take-up that will make them possible.

Following is the information:


Numbers of Pupils in Various Categories of Handicap in England, 


and those in Special Classes January1981



Total number of handicapped pupils
Handicapped pupils in special classes


Blind
975
7


Partially sighted
2, 098
205


Deaf
3, 471
491


Partially hearing
5, 029
3, 365


Physically handicapped
13, 990
639


Delicate
4, 986
348


Maladjusted
21, 256
1, 822


Educationally subnormal
101, 111
8, 400


Epileptic
1, 007
94


Speech Defects
2, 535
1, 085


Total
156, 458
16, 456

Mathematics

Mr. Guy Barnett: asked the Secretary of State for Education and Science if he will make a statement about Her Majesty's Government's policy towards the Cockcroft report on school mathematics.

Sir Keith Joseph: The Government welcome the report, and we hope that it will be widely read by all of those with an interest in the teaching of mathematics. We shall be considering the recommendations directed to us.

Mr. Barnett: I hope that the right hon. Gentleman has paid great attention to the report. Does he recognise that one of the issues raised in the report directly concerns him? I refer to the number of qualified mathematics teachers available. Does the right hon. Gentleman realise that it is no solution to attempt to attract mathematicians to the profession by paying them more than other teachers? That would be divisive of the profession. Does he accept that we must increase the amount of training and re-training for mathematics teachers? The Secretary of State's predecessor expressed concern about that two years ago. What have the Government done since then to deal with the problem?

Sir Keith Joseph: I cannot accept, Mr. Teacher—[Laughter.] I cannot accept, Mr. Speaker, that the Government should necessarily deny a partial market solution to a shortage. However, the Government have two schemes for helping to reduce the shortage of mathematics teachers and we shall consider what more needs to be done in the light of the report.

Mr. Peter Bottomley: Will my right hon. Friend do his best to encourage schools to let parents know that it is important that their children should be more successful at mathematics? At present there is a great gap in understanding about the importance of mathematics for future life.

Sir Keith Joseph: Yes, Sir. However, my capacity to influence what schools tell parents, and their capacity to influence parents, is necessarily slightly diluted.

Tertiary Education

Mr. Hal Miller: asked the Secretary of State for Education and Science if he is satisfied with co-ordination within his Department in implementing Her Majesty's Government's policy for the tertiary sector of education.

Mr. William Shelton: Yes, Sir.

Mr. Miller: While congratulating my hon. Friend on the state of order in his Department, may I none the less ask him whether he agrees that there is confusion in the minds of the public and especially among the universities that have had their grants reduced, resulting in a more unfavourable student-fellow ratio than in polytechnics and other local authority colleges? Is he aware that there has also been direction on the numbers of university departments and the numbers of people in those departments, while that control is not applied to local authority colleges? What are the student public to make of that situation?

Mr. Shelton: My right hon. Friend the Secretary of State has today answered some questions on universities. As my hon. Friend will know, the division of funding among the various universities is for the University Grants Committee and not for the Government.

Mr. Freeson: Will the Minister accept that it is not just a question of university education? Is he satisfied that there is adequate co-ordination between his Department and the Department of Employment and other Departments about tertiary education and training for 16 to 19-year-olds? Will he tell the House what specific negotiations and consultations are taking place between his Department and the Department of Employment and local education authorities, particularly in inner city areas, about the expansion of further education and training and the establishment of a development programme in that sphere?

Mr. Shelton: The right hon. Gentleman is right. That is an important area, the development of which is moving fast because of the expansion of the MSC programmes. I reassure him and the House that the Department of Education and Science is deeply involved. It has representatives on the special programmes committee, in conjunction with the MSC committee. It also has representatives on the steering group committee that deals with united vocational preparation. It is in consultation on every aspect of the matter. I am convinced that the outcome will be satisfactory.

Mr. Beith: What is Her Majesty's Government's policy on tertiary education?

Mr. Skinner: What is more, what is it?

Mr. Beith: Are the Government opposed to the creation of sixth form colleges and the association of sixth form colleges with colleges of further education?

Mr. Shelton: When plans are put forward under section 12 of the Education No. 2 Act 1980, my right hon. Friend the Secretary of State looks at the individual responses and needs and makes a decision. In general, the policy of the Government on tertiary education is to make


available as wide a range as possible of attractive options to youngsters at 16 so that they will remain in full-time schooling. I am delighted to say that a further 10 per cent. of them are doing so now.

Mr. Whitehead: If the Minister is so satisfied about the present state of affairs, may I ask whether he is also satisfied with the envisaged cut in the staff-student ratio in the colleges? How can there be an expansion of the services that he and we say we wish if the staff-student ratio is to be further cut?

Mr. Shelton: That is a separate question. If the hon. Gentleman would like to table it, I shall answer it.

Universities

Mr. Hannam: asked the Secretary of State for Education and Science what is his estimate of (a) the savings by 1984 as a result of the reductions in university expenditure and (b) the cost of redundancies of university staff in the same period.

Mr. Waldegrave: My right hon. Friend estimates that by the end of the financial year 1983–84 cumulative savings at constant prices will be over £200 million and that the savings thereafter will be of the order of £150 million a year. The cost of redundancies depends on decisions by individual universities about how to adjust to their new levels of funding.

Mr. Hannam: Does not the fact that the Government have had to make a substantial increase in the finance available for the redundancy scheme show that the case for extension of the time scale is well founded?

Mr. Waldegrave: No, Sir. Even the figures of the Association of University Teachers, which made as favourable assumptions for teachers as possible, show that there was an outlay of £100 million on academic redundancies to make an annual saving of £77 million. That is not a bad deal.

Mr. Cryer: Is it not disgraceful that the Government are continuously talking about cutbacks in university expenditure, and a reduction of choice and of opportunities for young people, while at the same time they are talking about spending between £6 billion and £10 billion on Trident nuclear missiles? Where are the Government's priorities? Surely they should be spending more on universities and creating more opportunities for young people?

Mr. Waldegrave: The Government will be spending billions of pounds on higher education. That they are also spending billions of pounds on the proper defence of the country is entirely just.

Examination Results (Independent Schools)

Mr. Campbell-Savours: asked the Secretary of State for Education and Science whether he will take steps to ensure that the procedure for the publication of examination results by the independent sector in education is brought into line with that which exists in the State education sector.

Dr. Boyson: Schools participating in the assisted places scheme are already required to publish the same information on examination results as maintained schools. My right hon. Friend has no powers to extend this requirement to schools in the independent sector.

Mr. Campbell-Savours: Why are many schools failing to publish those examination results? The results are not being made available to the public in the way intended by the law. Could it be that examination standards in the public schools are not as high as in State schools?

Dr. Boyson: The hon. Gentleman had better ask individual public schools. The maintained schools would not have told us their results if we had not passed the Act last year. Parents can check the examination results of public schools before they pay the fees for their children to go there. As people with children in the maintained schools sector pay rates and taxes, they, too, have the right to know those results.

Oral Answers to Questions — PRIME MINISTER

Engagements

Mr. Lee: asked the Prime Minister if she will list her official engagements for 16 February.

The Prime Minister (Mrs. Margaret Thatcher): This morning I had meetings with ministerial colleagues and others, including one with the President of the Council of Europe. In addition to my duties in the House, I shall be having further meetings later today. This evening I hope to have an audience of Her Majesty the Queen.

Mr. Lee: Now that the bookmakers are making my right hon. Friend the favourite to win the next general election, will she, in planning her second term of office, give serious consideration to the possibility of phasing down the retirement age by, for example, one year each year over the next five years. so that new job opportunities are given to our young people?

The Prime Minister: I am grateful to my hon. Friend and to the bookies for the fact that they are saying -Now's the time to back Maggie." With regard to the latter part of my hon. Friend's question, the cost of having a retirement age of 60 for men would be so large that it could not be considered now. It would cost about £2.5 billion net a year. As we are already paying between £12 and £13 billion in retirement pensions, and as we must remember that we must take the money from the working population, I cannot give my hon. Friend any encouragement about reducing the retirement age to 60. However, I believe that a Select Committee is considering a common retirement age at the moment.

Mr. Foot: rose——

Hon. Members: Retire.

Mr. Foot: I refer to the right hon. Lady's earlier reply. How do those facts accord with the collapse in manufacturing output to the lowest figure for over 14 years? Does the right hon. Lady regard that figure as confirmation or otherwise of the optimistic prophecies that she has been making over recent months?

The Prime Minister: I think that the right hon. Gentleman is referring to one month's figures—those for December. He will remember that—far from the worst weather for 15 years—we have had the coldest weather since the late 1800s. May I refer him to the view about those figures—incidentally, taken quarter over quarter they represent an increase in output—expressed last night


by one of the policy advisers to the previous Government, who said that if one looks behind the figures for the reasons for the decline, they become a lot less interesting? He said that there were two reasons and also that
in November we had strikes in British Leyland and Ford, which cut production in that month.
This point is much more important:
in December we had this extreme spell of cold weather which not only cuts overtime working but also cuts deliveries from the factories to the shops and automatically production stops.
He went on to say:
I think that the trend over, say, the rest of this year"—[Interruption.]
That was the political adviser to the last Labour Government dealing with the question that the right hon. Gentleman asked. He continued:
I think the trend over, say, the rest of this year is certainly strongly upwards.

Mr. Foot: Has the right hon. Lady compared those figures with the recent estimates of the CBI and realised that they very much accord with its estimates? Does she take any account of these matters, or will she go on prophesying that the figures are getting better when all the facts and the mass redundancies throughout the country prove to all that they are getting worse? Are we to have more of the same policy when her right hon. and learned Friend the Chancellor produces his Budget?

The Prime Minister: If one compares the fourth quarter of last year with the third—[Interruption.] The Opposition may not like it, but industrial production actually rose. It fell in December because of the terrible weather, much longer holidays and strikes, but it is the right hon. Gentleman who backs the strikes, not me.

Mr. Rippon: Will my right hon. Friend consider today instituting an inquiry into the circumstances and effects of the transfer of titles of Times Newspapers Ltd.? In particular, will she seek an assurance from her right hon. Friend the Secretary of State for Trade that there has been no breach of the letter or the spirit of the undertakings given by the proprietor in January last year?

The Prime Minister: It looks as though the legal situation is very complex and there is more than one view upon it. As my right hon. and learned Friend knows, I am, therefore, not the person to pronounce on the legal matter. My right hon. Friend the Secretary of State for Trade is of course looking into it to see whether the law has been upheld.

Benefits

Mr. R. C.Mitchell: asked the Prime Minister whether she is satisfied with the co-ordination between the Department of Employment and Department of Health and Social Security with regard to the prompt payment of unemployment and supplementary benefits.

The Prime Minister: In general, I am satisfied with the co-ordination between the Department of Employment and the Department of Health and Social Security on the payment of benefits to unemployed people. Following the comprehensive Rayner scrutiny of the system last year, further improvements are being introduced and other possibilities are under consideration.

Mr. Mitchell: Is the Prime Minister aware that Members of Parliament are receiving more and more complaints about delays in paying supplementary and

unemployment benefits, which is causing considerable hardship to a large number of people? Is she aware that many local DHSS offices are now unable to cope with the increased demand caused by the Government's economic policies? Will she either authorise an increase in staff or introduce a simplified procedure for claiming benefits?

The Prime Minister: As the hon. Gentleman knows, the Government have been trying to introduce a simplified procedure for the very reasons that he has stated. Staffing levels are reviewed so that they bear a direct relation to the increased load placed on local offices. I am sorry if the hon. Gentleman has found difficulty. There has been some difficulty due to the bad weather and the rail strikes and some letters and forms have not been received. If the hon. Gentleman has any particular cases in mind, we shall gladly look into them, because we are anxious that benefits should be paid promptly and on time.

Mr. Best: Will my right hon. Friend confirm that Girocheques are dispatched deliberately to avoid the weekend so that claimants do not have the difficulty of being without payments over the weekend?

Mr. McNamara: Rubbish.

Mr. Best: Will my right hon. Friend also confirm that during the recent rail dispute Girocheques have been despatched a day earlier to ensure that there is no difficulty? Is my right hon. Friend aware that my recent letter to the Under-Secretary of State for Health and Social Security, my hon. Friend the Member for Wallasey (Mrs. Chalker), was the only communication that she had received complaining about delays in the payment of Girocheques?

The Prime Minister: We have not received many complaints about the payment of Girocheques. I confirm what my hon. Friend says. The offices strain to see that claimants receive a good and prompt service.

Mr. Freeson: How can the service be improved or even maintained when the work load per staff member is increasing significantly? Is the right hon. Lady aware that Ministers' answers to questions that I have tabled recently on this matter suggest that the staff is inadequate in number and therefore overloaded? Does she therefore agree that people are not receiving the benefits to which they are due, that there are long queues and that there is a failure in co-ordination?

The Prime Minister: I do not believe that there is a failure in co-ordination. The staff in those offices work extremely hard. The staff levels are always under review in relation to work loads in local offices. Moreover, the supplementary benefits scheme has recently been the subject of a major review, the results of which are steadily being implemented.

Engagements

Mr. Ancram: asked the Prime Minister if she will list her official engagements for Tuesday 16 February.

The Prime Minister: I refer my hon. Friend to the reply that I gave some moments ago.

Mr. Ancram: Has my right hon. Friend had time to see the leaflet distributed to unemployed people by the Department of Health and Social Security seeking to define the suitability of jobs for people on the


unemployment register? In the light of the present tragic unemployment figures, does she consider that the definitions provided in that leaflet are still relevant or does she believe that they make the provision of jobs more difficult at a time when we should be doing everything possible to make more jobs available?

The Prime Minister: I have seen the leaflet to which my hon. Friend refers. As it received a good deal of publicity a week or so ago I looked at the definition of what is a suitable job, which seems to have remained unchanged since 1946. It seems to me that the definition would preclude people from taking jobs with reasonable pay and I have asked my right hon. Friend the Secretary of State for Social Services to look into the matter.

Mr. Steel: Has the Prime Minister had time to consider early-day motion No. 196 about the so-called youth training centres set up by the Workers' Revolutionary Party?

Mr. Skinner: How many women are there?

Mr. Speaker: Order.

Mr.Speaker: Order.

Mr. Skinner: I was only asking about the percentage of women.

Mr. Speaker: Order. I know that, but the hon. Member for Bolsover (Mr. Skinner) must try to control himself. It seems that whenever the Leader of the Liberal Party speaks the hon. Member for Bolsover feels that he must contribute as well. That is not so.

Mr. Steel: Given that the Department of Employment is concerned about this matter, what steps will the Government take to draw the attention of the public to the abuses taking place at the centres?

The Prime Minister: If there are abuses, we shall of course look into the matter. I do not know the truth or otherwise of what is contained in the early-day motion, but

I assume that it is true, because it has been put down —[HON. MEMBERS: "Oh."] Perhaps I should say that I assume it to be true for the purposes of the question. That might be a safer way to put it. If it is true that
young people have been trained in anti-police methods and indoctrinated with extreme revolutionary views, without the knowledge of public figures on Merseyside whose names were originally used in support of the scheme", 
that is a very serious matter. I should take any such action extremely seriously and it would of course have to be investigated.

Mr. Newens: asked the Prime Minister if she will list her official engagements for Tuesday 16 February.

The Prime Minister: I refer the hon. Gentleman to the reply that I gave some moments ago.

Mr. Newens: Will the right hon. Lady find time today to consider the financial crisis now facing the Essex county council as a result of the rate support grant settlement, which has dismayed even its Conservative leaders, who are worried by the response that they have received from her right hon. Friends? Is she aware that this threatens educational services, old people's homes, fire cover and many other local government services in Essex? It is extremely important that she should intervene to see that something is done about it.

The Prime Minister: As the hon. Gentleman knows, all rate support grant figures have been published and the local authorities know them. We are debating the whole matter today, as it affects England and Wales. I am sure that he will put those views strenuously to my right hon. Friend.

Mr. Speaker: I have received notice of three applications for emergency debates under Standing Order No. 9. I shall take them in the order in which they were received.

Leyland Vehicles

Mr. Tam Dalyell: I beg to ask leave to move the Adjournment of the House, under Standing Order No. 9, for the purpose of discussing a specific and important matter that should have urgent consideration, namely, 
the situation of Leyland Vehicles in Lancashire following the talks yesterday.
The management has said that if the dispute is not settled by the end of the week, in the words of Mr. David Andrews, the managing director, 
It would be out of our hands very swiftly.
It is urgent because, if the members should vote on Thursday or Friday to continue the dispute, the management has said that it will close Leyland Vehicles and come out of the industry.
The matter is important because of the knock-on effect; eighteen thousand jobs are directly involved and there are multiplier or, dare I say, divider effects which will ripple around the British economy.
My task is to persuade you, Mr. Speaker, that this matter should have precedence over other important business. No Government should be able to pass by, as might a biblical Levite in this situation, on the other side of the road. Surely the Government's position ought to be made clear either in a short debate or by a statement. This situation must be clarified before fateful decisions are taken. Need I say any more, Mr. Speaker?

Mr. Speaker: The hon. Member for West Lothian (Mr. Dalyell) gave me notice before 12 noon today that he might seek to make an application under Standing Order No. 9.
The hon. Gentleman asks leave to move the Adjournment of the House for the purpose of discussing a specific and important matter that he thinks should have urgent consideration, namely, "the situation arising from the talks on Leyland Vehicles involving 18, 000 jobs directly, with a multiplier or divider effect around the British economy."
I listened with anxious concern, as the House has done, to what the hon. Gentleman said in submitting his application because he has called attention to a very serious matter. As the House knows, under the Standing Order I am directed to take account of the several factors set out in the order, but to give no reasons for my decision.
I have carefully considered and listened with deep concern to the hon. Gentleman's remarks, but my powers are limited and I have to rule that his submission does not fall within the provisions of the Standing Order. Therefore, I cannot submit his application to the House.

Domestic Gas Prices

Mr. David Ennals: I beg to ask leave to move the Adjournment of the House, under Standing Order No. 9, for the purpose of discussing a specific and important matter that should have urgent consideration, namely, 
the decision of the British Gas Corporation to announce on Thursday 18 February a 22 per cent. increase in domestic gas prices within the next nine months.
As I understand it, it will be 12 per cent. in April and a further 10 per cent. in October.
This is a grave decision at a time when millions of people face great difficulties in paying their existing gas bills, particularly after one of the coldest winters in living memory. Hundreds of thousands of people have been forced into debt and are paying off accumulated bills by reducing their immediate spending, including those on supplementary benefit. The advice bureau in my constituency is crowded with such examples. For those dependent on State benefits—pensioners, the sick, unemployed, one-parent families and others with very small incomes—this will come as a fearful blow causing grave hardship and, in many cases, disconnections for non-payment.
The cumulative effect will be an increase of over 100 per cent. in the price of domestic gas in the past two years. There will be a 22 per cent. increase this year when millions of people on benefit have been limited to an increase of 9 per cent. for the same period covered by these gas increases. Of course, this will affect the retail price index.
This decision comes only one week after an Energy Minister denied that there would be increases of this level. This is the first opportunity to raise the matter in the House since it was announced yesterday. The urgency of the matter is clear, because if it could be debated today or tomorrow it would give the House an opportunity of preventing the announcement of the decision on Friday. For once, the House of Commons would be able to speak. Therefore, Mr. Speaker, I hope that you will accept my submission.

Mr. Speaker: The right hon. Member for Norwich, North (Mr. Ennals) gave me notice this morning before 12 noon today that he might seek to raise a matter under Standing Order No. 9 this afternoon.
The right hon. Gentleman asks leave to move the Adjournment of the House for the purpose of discussing a specific and important matter that he thinks should have urgent consideration, namely, 
the decision of the British Gas Corporation to announce on Thursday 18 February a 22 per cent. increase in domestic gas prices within the next nine months.
As the House knows and will have heard me say more than once, this is not the only way by which a matter of this sort can be discussed, although in this case the right hon. Gentleman has drawn my attention to the shortage of time involved.
I have given careful consideration to what the right hon. Gentleman said and I have to bear in mind the instructions that the House has given me. I have to rule that his submission does not fall within the provisions of the Standing Order and, therefore, I cannot submit his application to the House.

Lawrence Scott Electro Motors Ltd.

Mr. Charles R. Morris: I beg to ask leave to move the Adjournment of the House, under Standing Order No. 9, for the purpose of discussing a specific and important matter that should have urgent consideration, namely, 
the scale of police operations undertaken by the Greater Manchester police today outside the premises of Lawrence Scott Electro Motors Limited at Openshaw, Manchester.
I apologise to the House for imposing a further application on it, but that this matter is urgent and specific is


evidenced by the fact that 200 to 300 policemen of the Greater Manchester police force are at this moment surrounding the premises of the Lawrence Scott company in support of a decision by the management of that company to strip the factory of machinery and engineering products. It is urgent because today's events, which will probably continue over the next few days, are the culmination of an industrial dispute which has lasted 10 months.
It is urgent because my constituents, who live in houses which stand cheek by jowl with the factory, during the course of the dispute have been awakened from their beds by sledgehammer-wielding teams of bailiffs taking repossession of the factory. The householders' children have been subject to anxiety as a result of the hazardous helicopter operations initiated by the management. As ratepayers, they will now be obliged to pay for the massive police presence in support of the commercial activities of the managing director of the Mining Supplies Company which precipitated the dispute when it took over the Lawrence Scott company in October 1980.
That this matter is important is clear from the fact that 650 of my constituents, many of whom have invested a lifetime's skill in the Lawrence Scott company, have now lost their jobs. Some may never work again. They live in an area in which few if any other jobs are to be had. I believe that in justice my constituents are entitled to expect the House to find time to consider this important matter.

Mr. Speaker: The right hon. Member for Manchester, Openshaw (Mr. Morris) gave me notice that he would seek to move the Adjournment of the House to discuss
the scale of police operations undertaken by the Greater Manchester police today outside the premises of Lawrence Scott Electro Motors Limited at Openshaw, Manchester.
The House knows that an application under Standing Order No. 9 is not the only procedure under which this important matter can be discussed. The right hon. Gentleman will know that my powers are strictly limited to whether we have a three-hour debate tonight or tomorrow night on the important issue that he has raised.
I have to take into account the several factors set out in the order but to give no reasons for my decision. I must rule that the right hon. Gentleman's submission does not fall within the provisions of the Standing Order and, therefore, I cannot submit his application to the House.
Later——

Viscount Cranborne: On a point of order, Mr. Speaker. We have had today three applications under Standing Order No. 9. It is a device that is being used increasingly in the House. Will you rule, Mr. Speaker, on whether the Standing Order is being abused?

Mr. Speaker: The hon. Member for Dorset, South (Viscount Cranborne) entered the House at the last

election. It has been my honour and privilege to serve in 11 Parliaments. [HON. MEMBERS: "Hear, hear".] There are times when my Welsh modesty comes to the fore! In every Parliament in which I have served the issue of emergency debates has been raised. It is in the hands of the House to change the rule if it so wishes. I understand that it decided not to do so when the issue was raised some time ago.

Canada Bill

Mr. David Ennals: On a point of order, Mr. Speaker. I apologise for speaking again, hut I wish to raise an issue of which I gave you notice.
On Thursday 11 February, as reported in column 1126 of Hansard, my hon. Friend the Member for Hackney, Central (Mr. Davis) raised with you the propriety of debating the Canada Bill tommorrow as its Second Reading might pre-empt the issues that are the subject of a petition to the House of Lords following a ruling by Lord Denning and two other Law Lords. You promised, Mr. Speaker, to make a statement at the appropriate time.
In his submissions to you, Mr. Speaker, my hon. Friend raised only the petition to the House of Lords for leave to appeal in the case brought by the Indians of Alberta, Nova Scotia and New Brunswick, but in addition the Indians of Saskatchewan have issued a writ in the High Court seeking certain declaratory orders. The case concerns five instruments that affect the British Crown and it was begun in the Chancery Division of the High Court on 14 January. This is not an attempt to delay proceedings in Parliament as the date for Second Reading of the Canada Bill came a month after the lodging of the summons in the High Court.
The Saskatchewan case raises issues that are not touched on in the Alberta case. I shall not go into the details of the differences, Mr. Speaker, but I can assure you that they are issues that are different from those which are the subject of a petition in the House of Lords.
As these legal submissions are being considered now, I submit that it would be improper for the Second Reading of the Canada Bill to be taken tomorrow. I am asking you now, Mr. Speaker, to take into consideration the documentation that I have supplied to you before you give your ruling, which I understand you will deliver tomorrow.

Mr. Speaker: I am much obliged to the right hon. Member for Norwich, North (Mr. Ennals). He has submitted a long document on the issue that he has raised and that is being considered. I shall give my ruling tomorrow before the Second Reading of the Canada Bill is debated, which I think is the appropriate time.

Maritime Safety

Mr. John Prescott: I beg to move, 
That leave be given to bring in a Bill to increase the safety of maritime vessels and their crews in United Kingdom territorial waters; and for connected purposes.
This weekend witnessed the loss of an oil rig off Canada and a Greek tanker in the Atlantic, with the loss of more than 100 lives. That emphasises the danger of the seafaring occupation. Even in the United Kingdom, the number of deaths among seafarers is four times that among those who are engaged in the dangerous occupation of coal mining.
My Bill, which is supported by hon. Members with Merchant Navy seafaring experience, is designed to improve safety standards for our seafarers. Some of the present inadequacies were highlighted by the tragic loss of the "Union Star" and the Penlee lifeboat in December, with the loss of 16 lives. That same week over 100 seamen died in roughly the same area. That disaster rated very little press attention.
Last week in the High Court in London judgment was delivered on the loss of the Liberian vessel "Salem", confirming that vessels are being sunk deliberately for the purpose of fraud. This twentieth century development of the nineteenth century coffin ship and marine frauds is growing to one a week. Some of it takes place under the British flag, but 90 per cent. of the practice takes place under flags of convenience.
The increasing growth of flags of convenience fleets—they now amount to over a third of world tonnage and many of the vessels are European—owned—is responsible for more than four times as many vessels being lost under such flags as the average loss under the flag of traditional maritime countries. The losses of such vessels, even with their entire crews, do not warrant investigation or inquiry in some of the flag of convenience countries. That applies even to British flags of convenience vessels. The entire crew of 17 of the "Barbra 'B'" was lost, but that did not warrant any inquiry by the Government. However, Panama conducted an inquiry into the loss of that British ship.
The only organisation to resist such practices and trends is the international trade union movement, which uses its industrial strength to protect exploited seamen against such practices. Even that is to be outlawed by the Government's trade union Bill, which has been welcomed by the flag of convenience operators. As British operators switch to phoney flags in the name of competition, seamen are forced to follow and to serve on ships which are less safe and which present greater risks to themselves.
The "Union Star" was British-owned and sailed under an Irish flag. It was able to carry two fewer men, with fewer qualifications, than would have been required if it had been a British-registered vessel. The Bill will require all vessels in United Kingdom waters to observe the minimum safety standards laid down and imposed by the House. Such standards reduce the risk to our crews, particularly the lifeboat men who have to go out to rescue such vessels in difficult circumstances.
The Bill seeks to emphasise that the captain's prime responsibility is the safety of the vessel and its crew. The refusal of the captain of the "Union Star" to accept towing or assistance in gale conditions, with 40 ft waves, and with

no engines or steering power, bordered on the criminal. It reflects the growing pressure that is placed upon captains to put commercial judgments before the safety of their vessels and crews. The Bill would make it clear that the captain has that prime responsibility.
The Bill goes much further. It requires that the captain of a ship that is in difficulty and has no motive power shall be forced to accept a tow. The irony is that, under international law, if the "Union Star" had been carrying oil or a dangerous cargo the Coastguard would have had the power to force the skipper to accept a tow and thus the crew of the vessel, and possibly the lifeboatmen, would not have been lost.
It is deplorable that Parliaments and international law give a higher priority to property—the saving of our beaches—than to saving the lives of seafarers. Understandably our seafarers feel that the spilling of blood gets little more attention in the House than does oil and its effect on our beaches.
The circumstances of the lifeboat tragedy demand that a public inquiry be held and an investigation made into related matters. For example, why did a certificated engineer join the "Union Star" on her maiden voyage and leave halfway through the voyage, to be replaced by a man less competent to deal with engine problems? [Interruption.] I hope that hon. Gentlemen are not saying "Nonsense". No doubt a public inquiry would establish the facts.
It is essential to assess the capabilities of the Coastguard and the air-sea rescue services. The cuts that are being imposed on the Coastguard Service's manpower, its watchkeeping facilities and on its whole capability are causing considerable concern, not only in the maritime industry and in the service itself, at low and high levels of command, but in the coastal areas that are affected.
A maritime authority should be established to deal with the many difficult problems of safety at sea because, increasingly, individual departments are proving to be incapable of dealing with cases involving small vessels. Moreover, in inquiries the Department of Trade acts as both judge and jury. That is not a satisfactory situation, and it should be changed.
The Bill seeks to make public inquiries compulsory when vessels and crews are lost. It would reverse the trend of the last few years of fewer public inquiries into losses. This is evident from answers to questions, which show that whereas preliminary inquiries were held in one out of every four losses, the figure is now one in 12. We are not satisfied that the reduction of expenditure and coverage in this sphere increase safety.
Finally, the Bill seeks to correct the inadequate way in which public appeals arising from maritime tragedies are handled. Such uncertainty appear to maximise private anguish for the surviving dependants and undermine public confidence in appeals. Claims by some surviving widows and orphans from the same incident are denied due to terms of reference that are too narrowly drawn.
Yesterday, at the memorial service for the Penlee men, the Prime Minister said that there was little of a practical nature that she felt that she could do. The first practical step that she and her Government could take would be to make it clear to the appropriate Minister that a public inquiry into the loss of the Penlee lifeboat is essential.
Secondly, the Government could support the Bill. It is the least that should be done for the seafaring community, or that Parliament should expect to be done for the dead


of the Penlee tragedy and for the seafarers who pursue a livelihood in one of the most dangerous of occupations. They do so in circumstances which are more dangerous than they need be, and which Parliament could improve by supporting the Bill.

Question put and agreed to.

Bill ordered to be brought in by Mr. John Prescott, Mr. Roger Stott, Mr. Gerard Fitt, Mr. Stan Thorne and Mr. Leslie Spriggs.

MARITIME SAFETY

Mr. John Prescott: accordingly presented a Bill to increase the safety of maritime vessels and their crews in United Kingdom territorial waters; and for connected purposes: And the same was read the First time; and ordered to be read a Second time upon Friday 2 April and to be printed. [Bill 68.]

Rate Support Grant (England)

The Secretary of State for the Environment (Mr. Michael Heseltine): I beg to move, 
That the Rate Support Grant Report (England) 1982/83, a copy of which was laid before this House on 5th February, be approved.

Mr. Speaker: I think that it is in the interests of the House if this is discussed together with the other two motions on the Order Paper:
That the Rate Support Grant (Increase) Order 1982, a copy of which was laid before this House on 28th January, be approved.
That the Rate Support Grant Supplementary Report (England) 1982, a copy of which was laid before this House on 28th January, be approved.

Mr. Heseltine: As you say, Mr. Speaker, it may be for the convenience of the House if this report is taken with motions Nos. 1 and 2 on the Order Paper.
I seek approval today for three measures: the Rate Support Grant (Increase) Order 1982, the Rate Support Grant Supplementary Report (England) 1982 and the Rate Support Grant Report (England) 1982–83.
The rate support grant order is central to the public expenditure policies of the Government. Technically, it is the means by which central Government distribute taxpayers' money to help finance the spending programmes of local government. But the process of determining the order is based upon the expenditure plans for the individual programmes settled by the Government. That has always been the case. It now involves indicating how £11.5 billion is allocated for over 20 major public services to more than 400 authorities. It is necessary to allocate the taxpayers' support after taking into account the amount each of these authorities should reasonably be able to afford having regard to their rateable resources and other potential local revenue.
The rate support grant has inevitably been a complex and controversial programme affecting directly every local authority and every constituency in the country. It was difficult enough when, every year, there was an increase in expenditure and when the principal basis of distribution was the actual spending decisions of each authority. Over the past three years, I have had to challenge these assumptions of additional expenditure, and I have sought to distribute the taxpayers' support not on the basis of what each local authority decided to spend but upon independently measured criteria of need.
The Government came to office, as I explained to the House in this debate last year, after a generation in which local government manpower in Great Britain had doubled, reaching nearly 3 million—11.2 per cent. of the working population—in 1979. The inevitable effect of inexorably increasing manpower bills was a savage reduction in capital spending programmes. The previous Government cut local government capital and ended up by halving the levels of 1975 before they lost the general election.
It is against this background of spiralling, unearned consumption that the shift in direction that I have sought in local government has to be seen. To anyone who has the first idea of the strain of the present recession on industry and commerce, or who knows of the damage to investment and jobs caused by high rates, the targets I set were reasonable and obtainable.
The simple fact is that between May 1979 and April 1982 I sought an overall reduction in the volume of local authority current spending of 5 to 6 per cent. That is under 2 per cent. a year.
There has been an uninterrupted flow of misleading threats as to the consequences that would follow. The carefully orchestrated headlines were contrived not to present views or inform the public; they were produced as part of deliberate campaigns to prevent any cuts at all. They are the familiar hallmark of assertive politics.
However, the results achieve by the great majority of local authorities now prove the reasonableness of my policies. Out of a total of 413 authorities, 279 are budgeting to spend within 2 per cent. of the reduced level. It is not any one class of authority. They represent 31 per cent. of shire counties, 69 per cent. of London boroughs, 47 per cent. of metropolitan districts and 77 per cent of shire districts. The onus is therefore on high spending authorities to prove why they cannot do what the majority are doing. It is no longer for me to prove that it is possible.
That is one part of what I mean by the beginnings of a change in direction. I shall return in a moment to the consequences of the behaviour of the minority of authorities that have decided to follow a different course.

Mr. Alfred Morris: Is the right hon. Gentleman aware of the statement by Mr. Peter Westland, under-secretary for social services of the Association of Metropolitan Authorities, that many local authorities can no longer meet their statutory duties under the Chronically Sick and Disabled Persons Act 1970, even to the very severely disabled? For example, Wandsworth is spending twice as much on its social services as the Secretary of State and his colleagues think it should be spending. Yet the borough is still reported to be unable to meet its statutory responsibilities towards disabled people. Is this situation not deeply disquieting to the Secretary of State and to the House?

Mr. Heseltine: I have not the slightest doubt that if any local authority in the country is failing in its statutory duty, someone will challenge the position of that authority. The right hon. Member for Manchester, Wythenshawe (Mr. Morris) is as aware as I am that the arrangement of priorities within each authority is a matter for that authority. We have made it clear that where the cuts should come is a matter for the individual authority's choice and discretion.
It is important for the right hon. Gentleman to square the statement that he has made, which doubtless is designed to present the cuts in the least favourable way, with the fact that 47 per cent. of metropolitan districts either have achieved or are very close to achieving my economies. The onus today is on those authorities which are not achieving or not attempting to achieve our policies to prove why it is no longer possible, because the majority of the authorities have proved that it is possible.
Another indicator of the change in direction is, of course, local authority manpower. The manpower bills of local government account for more than 70 per cent. of current spending and, as a result of pressures in the last three years, the graph which had risen so strongly year after year for 30 years has now turned downwards.

Between June 1979 and September 1981 the manpower level in local government in England dropped by 4.1 per cent. For nine successive quarters the numbers have fallen.

Mr. Dennis Skinner: Yes, to the dole queues.

Mr. Heseltine: The hon. Gentleman undoubtedly wants me to give way.

Mr. Skinner: The Minister is putting before the House figures which indicate that he is gloating because he has managed to get another few thousand people out of local government employment and into the dole queues. As for his figures being correct in terms of local authority expenditure, why should those in local government be terribly concerned about getting the figures to balance when this Government, of which he is a member, reached the end of the 1981 financial year having spent 60 per cent. more than they had originally calculated? The public sector borrowing requirement rose from £8, 500 million to £13, 500 million. Who is he to tell local authorities what to do?

Mr. Heseltine: The hon. Gentleman will want to make his own speech, but he is fully aware of the reason why I want to see lower levels of manpower in local government. It is because I want to help private industry, which has to pay the bills, to take on people, to invest and to enjoy a climate in which it can make the profits on which the prosperity of the hon. Gentleman's constituents depend.
For nine successive quarters, therefore, the numbers employed in local government have fallen. The latest figures show that in the 12 months to September 1981 the numbers employed in England dropped by about 42, 000 full-time equivalent—an annual rate of more than 2 per cent. In the last quarter alone, there was a 1 per cent. drop—an all-time record for a quarter.
I welcome and pay tribute to those local authorities which are now seeking to meet the Government's expenditure programmes. The fact that so many authorities are now showing that, with sensible manpower and recruitment policies, savings can be made, demonstrates once again the reasonable nature of what I have asked for. However, although the shift is happening, it is taking place late in the day. Unless the pace of the last quarter is maintained, it will still be below the level needed overall to maintain current spending targets.
Some authorities have made no effort. They have deliberately chosen to frustrate the Government's policies—policies often debated in and, of course, approved by the House. Instead of an overall reduction in real terms in current spending, we have a budgeted cash overspend of perhaps £1.3 billion this year. We have certainly stopped the upward spiral and rid ourselves of the inherited and unrealistic growth. The direction has changed, but, thanks to a minority of local authorities, it has not yet been reversed. I have decided, therefore, to confirm the withholding of £200 million from the 1980–81 rate support grant. It is for this reason that the first order for which approval is sought today provides only for an additional £84 million in grant. This increase is mainly for increased loan charges in that year. A full £200 million has been held back as the aggregate expenditure of local authorities in that year was 2½ per cent. above the volume target.
There is one other matter related to the rate support grant for 1980–81. The House knows that last October the Divisional Court, while holding that I had exercised my discretion to abate the grant of six London authorities on valid considerations, quashed the decision on the ground that I had not been prepared to receive representations from the authorities concerned after November 1980. The court held that it was open to me, after considering representations, to reach any decision I considered right. Accordingly, I invited the authorities concerned to submit further representations, and this they have now done.
Having considered carefully the points they have made and taken into account all the factors drawn to my attention, I have decided to reduce the amount of grant payable in respect of 1980–81 to authorities whose adjusted uniform rate exceeded 155p and whose expenditure does not qualify for a waiver. To this extent, this decision is the same as that I announced last year. However, I have decided to modify the conditions for waivers. Authorities which did not gain a waiver on the basis that I announced last year will have their performance recalculated, using outturn figures and appropriate repricing factors, with urban programme expenditure excluded from the calculation. I have made these modifications in response to points made by the authorities themselves. The modifications may enable some of the affected authorities to achieve a waiver and gain exemption from grant abatement.
I do not yet know whether this will be the case. My Department will be asking authorities to provide the figures for making the relevant calculations and will also be writing to the authorities directly affected by the decision to explain it in more detail.
The second measure is the supplementary report for 1981–82. This provides an increased grant of £122 million, mainly to reflect higher loan charges. The report also uses new data to bring up to date the grant-related expenditure assessments—GREAs—of individual authorities. As the report explains, there is likely to be a further supplementary report for 1981–82.
The Local Government Finance Bill makes express provision for adjustment of grant entitlement to reflect the degree to which authorities have followed the Government's expenditure guidance. If enacted, authorities which in 1981–82 spend above their volume target and above their grant-related expenditure assessment could have a loss of grant. There is no reason for the taxpayer to support authorities which choose to ignore the guidelines which have been set. I have explained in detail how the abatement will work. The remedy was in the hands of the authorities concerned. I shall bring the report before the House as soon as practicable.
Turning now to the main report for 1982–83, we are dealing with the disbursement of £11.5 billion of grant, provided by the taxpayer, to more than 400 authorities.
I appreciate that the earlier I can announce decisions, the better for local government, but there is a balance to be struck between informed and early decisions. It was immensely to the gain of local government that, albeit rather later than I would have liked, we were able to provide a settlement which met local government at least half-way on some of its more difficult problems, even though many of those problems were of its own making.
I made my announcements on 2 and 21 December, as soon as possible after examining authorities' revised budgets for 1981–82, including the £1 billion increase over

the White Paper provision. We made it clear in sending figures out on 21 December that we were going to alter the GREAs by substituting actual capital allocations. Of course, this happens every year, but usually later, in a supplementary report. This year we have done it earlier than usual to reduce the changes in GREA which would still have happened, but would have happened later.
I should refer here to the report of the Select Committee on Statutory Instruments which has suggested that the targets should have been included in the rate support grant report to Parliament. I have, of course, laid copies of the target figures in the Library of the House and they are available to any hon. Member. I did not include them in the report because, as the Committee points out. they have no direct statutory force. What will have statutory force is the grant abatement scheme. As I have assured the House, I shall bring full details of the abatement scheme before the House in a supplementary report before there is any question of its being implemented.
Our starting point for the total allowable expenditure was the overspend this year—an overspend which. as I have explained, stems largely from the refusal of a minority of authorities to adhere to the reasonable targets that I have set. Authorities in 1981–82 are planning; to spend about £17.5 billion. That includes the £1.3 billion cash overspend to which I have referred.

Mr. Bruce Douglas-Mann: To what extent was there an underspend of budgeted expenditure in previous years, and to what extent, therefore, is the planned overspend to which the right hon. Gentleman refers likely to be reached this year? Is that budgeted overspend likely to reflect local authorities' fear of the type of control that has been introduced in legislation to prohibit supplementary rates?

Mr. Heseltine: The overspend is not affected by the fear that there will be no supplementary rates. Only the rating provision, which is not on the same s of the income and expenditure account as the level of expenditure, may be affected, though I hope very much that that will not be the case.
As to the difference between outturn and budget, I do not have the precise figures, but I can give the hon. Gentleman the flavour of the position. In the years preceding the period for which I was responsible for local government there tended to be a 11/2 to 2 per cent. differential between budget and outturn, but that was always against the background of rising levels of expenditure and rising budgets. The indications for the past year or so are that there is not such a margin between budgets and the outturn, but this is a completely new situation for local authorities. They are having to reduce their expenditure and are therefore budgeting much more tightly than they did previously.

Mr. Douglas-Mann: Is the difference to which the right hon. Gentleman refers an underspend of budgeted expenditure rather that an overspend on past experience?

Mr. Heseltine: In the past five or six years there has always been an underspend on the budget by 1½ to 2 per cent., but the position is now changing. Our latest impression is that the budget and the outturn will come much closer than they did previously as expenditure expectations go down.

Mr. Anthony Beaumont-Dark: One of the nitty-gritty points is the grant-related


expenditure assessment for the police, where the Government have been generous to London at everybody else's expense. London has been given about £60 million—an increase of 24 per cent.—Merseyside has been given about £300, 000—an increase of 0.8 per cent.—and the West Midlands has received £1.4 million—an increase of just 2.8 per cent. How does that square with our promise at the general election that we regarded police expenditure as the most important thing, because we wanted the police to be up to full strength? Is my right hon. Friend aware that the West Midlands police force is now up to full strength and must remain so?
If the Government rightly say that the police force must not be cut—indeed it must not, because we should not be forgiven if it were—what would be his answer to people who said that other expenditure would have to be cut by 37 per cent.? Incidentally, I agree that the Labour-controlled West Midlands is a difficult authority on expenditure. Are the figures as I have been told? Shall we receive a better grant than the paltry sum that I have described, which would have meant that we were paying for London's lawlessness?

Mr. Deputy Speaker (Mr. Ernest Armstrong): Order. I remind the hon. Member for Birmingham, Selly Oak (Mr. Beaumont-Dark) that hon. Members must not make speeches in interventions.

Mr. Beaumont-Dark: It was a question, Mr. Deputy Speaker.

Mr. Heseltine: I know that my hon. Friend will bear with me. I intend to deal later in my speech with the point that he raised.
Before the interventions I had said that authorities were planning to spend about £17.5 billion in 1981–82, which implied the £1.3 billion cash overspend to which I had referred. But our original White Paper plans imply a total for 1982–83 of under £17 billion. To have stuck to the targets, and allowing for the overspend, I should have had to ask local government as a whole for a reduction in real terms of about 10 per cent. I decided against that.
Given the high percentage of manpower costs in local government current expenditure, there is a limit to any possible rundown in a given year on what can be achieved without redundancy payments that will actually put up the expenditure in that year. If I recognised that there was a point beyond which higher-spending authorities could not go, the only way to achieve the original target would have been to look to those authorities that were achieving my targets, or were close to achieving them, to make up for the failures of the rest. That would have been manifestly unfair. I therefore decided to protect the services in lower-spending authorities.
It would have been fair, given the notice that local government has been given, to base the RSG settlement for 1982–83 on the 10 per cent. reduction figure. But, following discussions with local government, I took the view that a reduction of 10 per cent. would be difficult to achieve in one year. I am therefore proposing an increase to £18 billion for the planned expenditure next year. That is a 2.8 per cent. cash increase over revised budgets for this year. It is over £1 billion more than the White Paper provision.
Our estimate is that, given the cash planning factors of 4 per cent. for pay and 9 per cent. for other costs, local

government overall needs to make a 3.2 per cent. reduction in real terms from the level of this year's budgets. That is a tough, challenging, but realistic target for local government as a whole.
The next element in the settlement is the grant percentage. We have decided that, as a further means of keeping up pressure on the spending plans of local government, it is fair for a higher percentage of those plans to be financed at the local level, especially given my acceptance of a higher level of overall spend. For that reason, I have reduced the rate of grant from 59.1 per cent. to 56.1 per cent. In cash terms, that means that the Government will provide a total of £111/2; billion in 1982–83—an increase of over £1/2 billion in cash on last year's settlement.
There are three further aspects of the settlement to which I would draw attention. First, the settlement refines the methodology for setting targets. In the past, all local authorities have been asked to make the same volume reduction in settling an individual target. That has been criticised by many authorities. The choice of base years is said to be arbitrary, and equal volume reductions are said to make no distinction between those authorities that have tried to reduce spending in the past and those that have not.
I have always recognised that there is some validity in those criticisms, and I have now begun to move away from those base lines. The new targets are based on the lower of the original or revised budgets for 1981–82. The budgets are then adjusted to compare spending in 1981–82 with both the volume target and the GREAs. For authorities spending less than both those limits the targets are higher. For authorities that are overspending, the targets are lower.
To underline the equitable nature of the new targets, we have built in two constraints. First, no authority is being asked for more than a 7 per cent. reduction in real terms compared with the lower of its original or revised budget for 1981–82, although, of course, if an authority has increased budgeted expenditure during the year against the Government's policy it will be expected to make a larger reduction to offset that increase. For authorities spending less than their volume target and GREA the maximum real reduction will be 1 per cent.
The new targets are fair. They are based on up-to-date spending figures; they include comparison with GREAs; they benefit authorities that have succeeded in reducing spending. On the evidence of three years they are reasonable.
There are three main changes in GREAs for 1982–83. After discussion with the local authority associations we have made a number of changes to the housing assessment this year. We assume an average increase in rents of £2.50 a week. Where that increase results in a notional surplus on housing revenue account the GREA is not, as it was last year, to be a minus figure. It is being set at zero. No GREA is reduced this year by an assessed surplus on housing revenue account. Many district councils have an improved GREA as a result. In agreement with my right hon. Friends the Secretary of State for Education and Science and the Secretary of State for Social Services I have altered the GREAs for education and personal social services to include more weight for social and economic factors.
Of course, I understand that no authority feels that its GRE assessment is exactly right. We are continuing to work on improvements with the local authority


associations. No single methodology could reflect the precise spending needs of over 400 different authorities, but the GRE system is the best available. Its overwhelming advantage is that we have opened up grant distribution to discussion and the public can now compare and contrast.

Mr. Christopher Price: I am sure that the right hon. Gentleman would agree that this is a very complicated subject and that even he has difficulty from time to time in comprehending it completely. He said that in agreement with his two right hon. Friends he had increased the social and economic elements in the GREA. By how much has he increased them? Is the increase significant enough for any inner city local authority to feel the difference, as it were?

Mr. Heseltine: Yes, it certainly is. That is one of the reasons why the shift of grant has taken place between various authorities in the distribution this year. I shall try to help the hon. Member and perhaps the House, because it is very important to understand how the system works.
When the public expenditure programmes have been set Department by Department. individual Departments then work out how the money should be allocated to the various authorities which administer the services. My task as Secretary of State for the Environment is to draw together, on the basis of the advice I get from the specialist Departments, the whole of the rate support grant settlement. Of course, policy decisions about the allocation of public expenditure ceilings are initiated by the various sponsoring Departments, although I have a coordinating role and am deeply involved in consulting those Departments. As I have said, the work is done in conjunction with the working groups in local government.
I also propose this year to abate grant for authorities which overspend their targets. I should make it clear that no authority spending below its GRE will suffer grant abatement. Only authorities spending above target and above GRE are affected; and, as my right hon. Friend announced earlier in the month, we will not change the grant abatement rules in mid-year. Authorities understand the methodology for grant abatement next year, and we have undertaken to amend clause 4 Local Government Finance (No. 2) Bill now in Committee to ensure that in future tha principles of grant abatement will be set out in the main report for the following financial year.
Those are the main components of the settlement. It is a realistic, fair and achievable package.

Mr. W. Benyon: Before my right hon. Friend leaves this complicated matter, can he give an assurance that the vexed question of rapid increases in population will be considered in time for next year's assessment?

Mr. Heseltine: I am grateful to my hon. Friend. I intend to deal with that point.
I apologise for detaining the House but there are many matters of great concern. The subject is complicated and I must go through these matters with care. Let me comment on specific aspects that I know have caused concern on both sides of the House. Providing expenditure targets are met, M expect the metropolitan areas outside London to retain broadly the same share of the grant total that they have received in recent years, that is, between 29 and 30 per cent. In London the loss of grant during 1981–82 far exceeded the partial reversal I had planned of

the unjustifiable gain of £300 million grant from the shire areas which took place under the right hon. Member for Stepney and Poplar (Mr. Shore). That loss of grant was entirely as a result of overspending by London authorities.
For 1982–83 I am giving London the prospect of an improvement in its grant share' if expenditure targets are met. That is an opportunity for London, but the House will want to balance that against the considerable shift above what I anticipated that took place as a result of the high spending policies of London in the current year.
There is one change of policy incorporated in the report compared with the proposals issued in December. Those proposals provided for an increase in the proportion of rateable value of London authorities which is discounted in assessing grant entitlements. This change was to be effected by the setting of a multiplier in the same way as the special within London equalisation arrangements and the general safety net provisions. To some extent, these different multipliers interacted so that a minority of London authorities gained no benefit from the changed discount.
On further consideration, I have decided that this was not a fair arrangement and I have therefore recalculated the multipliers so that the benefit of the improved discount is applied as a final stage in the calculation, so allowing all London authorities to benefit equally. So that this change would not disadvantage authorities outside London, it has been necessary to increase slightly the aggregate Exchequer grant.
I shall deal more specifically with the inner city partnership authorities. The change which I have made in the method of assessing GRE to which I referred a few minutes ago to take more account of their particular problems has helped many of these authorities. but for some of them—Manchester, for example—problems remain from the years of unrestrained expenditure growth.
I have never made any secret of my view that more investment in our inner cities is essential, but we cannot make the room for increased capital investment until the stranglehold of ever-increasing current consumption is loosened.
This year I have been able to make a start on capital expenditure. On housing I have been able to announce a real growth in the gross provision for housing capital of 3 per cent. The inner city partnership and programme authorities have been given extra recognition in the distribution formula—as a result their share of the total HIPs will now be an all-time high of 34.6 per cent
I have announced the largest ever urban programme of £270 million. Resources for the partnership authorities will increase by 32 per cent. and for programme authorities by 21 per cent.
I have been urged to consider once again exempting the inner city authorities from having to include their urban programme expenditure when judging their performance against their expenditure targets. The targets for next year differ from earlier targets by being based on actual expenditure levels this year. They therefore largely reflect already existing patterns of spending on the urban programme. The case for an exemption is less clear cut, therefore.
I attach priority to continuing reductions in current expenditure in the inner cities. Nevertheless, I have shown my willingness to be flexible in considering representations from the inner city authorities where these are founded on genuine endeavours to respond to the need for


economies, as I have shown by the decision I have today announced on the waivers on the transitional arrangements for 1980–81.
My hon. Friend the Member for Birmingham, Selly Oak (Mr. Beaumont-Dark) has asked about the police. I am aware that the metropolitan counties have been discussing with my right hon. Friend the Home Secretary the level of their police expenditure in the light of the expenditure targets that I have set. All of these authorities have been set tough targets. This reflects their existing high levels of expenditure. For three of the counties—Merseyside, West Midlands, and West Yorkshire—their decision to increase expenditure or revenue support for transport undertakings has increased their difficulties. I expect those authorities to make expenditure reduction based on their already high level of spending in relation to both this year's target and their GREs.
The authorities concerned must decide for themselves how to set about meeting their expenditure targets. I could not accept their contention, however, that reduction must inevitably fall equally on all services. No service is exempt from the search for economies, but, as the House knows, the Government attach priority to the law and order services and we have provided for this priority in our expenditure plans. The House will expect the metropolitan counties to recognise this priority and seek to find the bulk of the reductions required from those services where they know they are overspending most.
The position of police authorities outside London will be improved by the news today that the precept of the Metropolitan Police will be based on a budget approved by my right hon. Friend the Home Secretary. That provides for total expenditure in 1982–83 of £325 million. That figure is about £13 million lower than the estimate included for GRE purposes in the RSG report. An adjustment to the Metropolitan Police GRE will be made at an appropriate opportunity during the year. There will be modest consequential increases in the GRE figures for police authorities outside London at that time.
Let me say a word about the rural areas—the non-metropolitan areas. Under the Labour Government those parts of the country steadily lost their share of grant to London. It shrank from 57.3 per cent. in 1975–76 to 53.6 per cent. in 1980–81. Last year I took steps to correct that unjustified switch. The non-metropolitan share of grant rose to 55.4 per cent. after revised budgets. For 1982–83, the non-metropolitan share is likely to be about the same, although that will depend on the budget decisions of all authorities.
Some of the non-metropolitan counties are concerned about loss of grant through the close-ending adjustment that must take place later in the year. I have had representations from such authorities as Surrey and Hertfordshire on that point, but it now seems likely that the amount of close-ending reductions will be very small indeed in 1982–83. That is good news for those authorities. Other authorities, such as Essex and Buckinghamshire, have made the point that the statistical base is out of date.
Next year the census results will be coming on stream. We shall incorporate those figures next year. If there are authorities whose population growth was underestimated

before the census, the new figures will be fairer to them. I hope that that answers the point made by my hon. Friend the Member for Buckingham (Mr. Benyon).
The House will be aware that the level of overall local government expenditure is primarily within the control of local government. We know that 70 per cent. of current costs go on manpower. The level of pay awards is in their hands. If staffing costs rise faster than allowed for, savings elsewhere must be found. In the private sector, employers cannot be insulated from excessive price increases. They must reduce costs, and the same must apply in local government. Instead of leading an inflationary cycle, I wish to see the local government sector leading an accelerated downward trend. The success—or otherwise—of that trend will be reflected in the rate bills of individual councils.
I have refused to set targets for levels of rate increases. I do not believe that that would be a helpful exercise. For example, last year in local government there was a range between an increase of 47 per cent. and a reduction of 3 per cent., so averages mean little. But every councillor now taking decisions has an essential role in the strategy for beating inflation. The decisions taken by local government affect every family's budget, but they also affect the industrial and domestic ratepayer. If councillors have not yet realised that their high rate policies are destroying the jobs and the investment in their areas, they have not listened to the clamour of indignation now coming from those who must earn the wealth that some councils are so freely prepared to spend. There is no question but that they want councillors to keep spending within the set limits. They wish councillors to make savings where they can and they want greater efficiency.
I wish to pay tribute to my hon. Friend the Member for Peterborough (Dr. Mawhinney), who is to be congratulated on the way in which he has persuaded his local Labour council and his local industrialists to work together in looking for economy and efficiency. I wish that we saw far more of such common sense of community. It is in stark contrast to Labour Party spokesmen, who lose no opportunity to encourage and support high rate policies.

Mr. Tony Durant: In view of what my right hon. Friend has just said and his earlier remarks about aid to the shire counties being in sharp contrast with what happened under the Labour Government, would it not be wrong for a local authority such as Berkshire to increase its rates by 371/2 per cent., which seems to me astronomical and unfair to industry?

Mr. Heseltine: I support my hon. Friend, who I know has expressed those views trenchantly locally. It is to be regretted that, when jobs are being lost and investment cut and the wealth-producing sector of the economy is severely strained, local authorities do not bear their fair share of the responsibility to try to contain expenditure.
There has never been—I support the efforts that many of my colleagues are making locally in support of the matter—a greater opportunity for industry and commerce to bring their management expertise and experience to support local government in its search for economies. Perhaps it is not sufficiently recognised that, as a result of what the Government are doing, there has never been so much published information to help those who seek economies to effect them.
Each local authority now should be publishing, service by service, its quarterly manpower figures. Each planning


authority should be publishing the time that it takes to deal with planning applications. By April there should be registers of unused or underused land of over an acre in size, owned by the public sector in each district authority. The housing authorities should be publishing the cost and value of their capital housing projects. The Chartered Institute of Public Finance and Accountancy—the organisation of local government treasurers—now publishes detailed comparisons of the cost of services provided by each authority. They include actual expenditure figures for 1979–80. In the pressure of recession and the search for economy, there are endless questions to be asked and the information from which to ask them is or should be publicly available.
I shall give an example of some of the questions to be asked. It is perhaps for the right hon. Member for Manchester. Ardwick (Mr. Kaufman) to provide the answers. In Camden, the net annual cost of all services for every 1, 000 people is £370, 000. In Lambeth it is £285, 000. In Wandsworth it is £200, 000. Why does it cost 85 per cent. more in Camden than in Wandsworth?
In the London borough of Haringey, it costs £619 a year for every primary school child. In Barking and Dagenham—also Labour—controlled London boroughs—the cost per child is £504. That is a difference of 21.8 per cent. But, it could be argued, surely Barking must have a vastly inferior pupil-teacher ratio. That is not what the CIPFA statistics show. It is 20 in Haringey and, similarly, 21.7 in the much less expensive Barking
I have taken those figures almost at random from the first dozen pages of the CIPFA statistical comparison. It is an invaluable source for every inquiring ratepayer. Why does it cost £2, 859 per 1, 000 population for planning in Tyne and Wear county and only £767 in the West Midlands? That is a difference of over 300 per cent. Perhaps the ratepayers in Tyne and Wear deserve an explanation.
I was interested to see that in Sheffield this month the Labour-controlled council decided to increase the rates by 20 per cent. for domestic ratepayers, and 18 per cent. for industrial ratepayers. Yet only in November a local Engineering Employers Federation survey produced a report showing lost jobs and the cancellation or postponement of £1.5 million of investment as a result of last year's 40 per cent. increase. I was startled to read that the chairman of the budget committee is alleged to have said:
I think we are now running a very tight ship.
That was after a 40 per cent. rate rise followed by a 20 per cent. rate rise in a city where the net cost of services per 1, 000 population is 9 per cent. higher than in neighbouring Rotherham and where the cost of refuse collection is 20 per cent. higher than in Doncaster, in the same county area. It costs £649 to educate a secondary pupil in Sheffield and £573 to educate the same pupil in Bolton—a town that I chose because the pupil-teacher ratio is the same.
I cannot know the answers to those questions. They are matters for each authority. But I know that it is right that local people should have the information for an informed public debate and for the wider protection of the ratepayer.
There is a wider lesson to be drawn. This settlement is about responsibility. We now have a system that brings home more clearly than ever before the responsibility of the individual councils for their actions. It is a responsibility that is more visible than ever before. I began

by talking about a shift in direction. Over the next 12 months it is my belief that that shift will accelerate. That is my objective, and that is what I shall continue to work for.

Mr. Gerald Kaufman: Listening to the Secretary of State is somewhat like watching the dance of the seven veils. As he peels off each layer we feel that this time, surely, at the conclusion of the performance the truth will be revealed. But when the seventh veil has been discarded we find that all that has been disclosed to us are seven more veils. The right hon. Gentleman may not be good at much, but he is certainly an expert at concealing the truth.
The rate support grant settlement is a prime specimen of his art. After a 45 minute speech by the right hon.Gentleman purporting to explain it, we know, on the whole, rather less than when he rose to address the House. We know that he has reduced the level of grant from 59.1 per cent. to 56.1 per cent., but he gave us no idea what this means in real money. By insisting on comparing the cash award, made last year in last year's prices, with the cash award made this year in this year's prices, the Secretary of State seeks to give the impression that the value of the grant settlement has risen. This is far from the case. Any attempt to obtain a true comparison on a constant price basis has been met with the response that these figures are best presented in cash terms.
On the other hand, local authorities are required to work out on a constant price basis how much they are to cut this year's budgets to conform to next year's targets. The Secretary of State has refused to tell us how much he is cutting their grant on the same constant price basis. Therefore, I wrote to the Prime Minister asking whether she could help and I received the following explanation:
In some circumstances it may be meaningful to compare expenditure on a constant price basis but it is more difficult to revalue the financing item. It is particularly difficult to make meaningful comparisons involving future years, where the mix of expenditure which the grant will finance is necessarily uncertain.
There are special reasons for using constant prices in constructing the expenditure targets for 1982–83 … This was done so the impact on the target policy could be contained within achievable limits.
Book tokens are offered for the first three correct explanations opened.
As Ministers will not publish the calculations that they have certainly made—[HON. MEMBERS: "What is the correct answer?"] I am about to say that the Minister has the information but will not give it.
As Ministers will not publish the calculations that they have certainly made within their Department and which the Treasury also has, I will assist by publishing them. In constant prices, the Secretary of State has reduced the block grant for the coming year by £827 million, a reduction of 8.7 per cent. Worst hit of all are the partnership and programme authorities, the inner cities, for whom the Prime Minister has just demonstrated her compassion by appointing the Under-Secretary of State for the Environment, the hon. Member for Ealing, Acton (Sir G. Young) to look after them. He is not so much an overlord as a mini-Minister.
The inner city share of the rate support grant has fallen drastically since the Government came to office. One would never guess that from the passage in the Secretary


of State's speech today. Compared with Labour's last year in office the share of rate support grant going to the inner cities has fallen from 23.5 per cent. to 18.6 per cent. of the total. This year they will be losing £154 million in block grant alone. The Secretary of State is also reducing housing subsidy by £427 million. That means that the local authorities will have to find another £1¼ billion out of rate revenue simply to maintain services and employment at present levels. Even if local authorities make massive cuts, the reduction in the rate support grant will still mean greatly increased rates and precepts.
This is quite apart from the Government's insistence that local authorities should calculate their budgets on an assumption of pay settlements of 4 per cent. when all settlements to date have been well above that level, and on a 9 per cent. inflation rate, when it has just been confirmed that inflation is running at a consistent 12 per cent. So rates will go up substantially, directly as a result of this rate support grant settlement.
When he announced the settlement, the Secretary of State claimed:
Provided that local government seeks to match our target expenditure levels, rate increases generally will be low next year.
Three areas, East Sussex, Essex and Wiltshire, all less than 3 per cent. above the penalty level, are having to raise their precepts by, respectively, 13.8 per cent., 14.9 per cent. and 13.9 per cent.
My hon. Friend the Member for Harlow (Mr. Newens) referred, at Prime Minister's questions today, to the plight of Essex. Essex has now sent a telegram to its Members of Parliament complaining that its representations to the Secretary of State have been ignored. It is true that the rate support grant settlement includes a safety net to protect local authorities in danger of suffering an excessive grant loss.

Mr. Stanley Newens: Before my right hon. Friend leaves the question of Essex, is he aware that the Secretary of State and his colleagues have confirmed that Essex is one of the most efficient and prudent authorities? It has still suffered the heavy cut to which my right hon. Friend is referring. Surely that shows that there is no reward for pursuing the economic policies that the Secretary of State advocates?

Mr. Kaufman: As I shall seek to demonstrate to the House, it is a sad fact that the more prudent a local authority, the more likely is the Secretary of State to punish rather than reward it.
It is true that the Government tell us that the safety net to protect local authorities in danger of suffering an excessive grant loss has been increased. The Government tell us that the safety net this year will be brought into operation when an authority suffers a grant loss of 5p in terms of rate poundage, compared to 13p last year. That is a great improvement and we should be thoroughly grateful for it, except—I am afraid that with this Secretary of State there is always an "except"—that the safety net is based not on what the local authority will actually be spending but on what the Department of the Environment says that it should be spending.
In the overwhelming majority of cases that will be the lesser of the two. Therefore, in the "through the looking glass world" in which local authorities are being required

to budget, the Secretary of State may deem a council to be gaining grant when it is losing grant. Even though the safety net has been raised, many local authorities will jump, expecting this protection, but will find that they go right through one of the holes in it.
Local authorities are also being denied grant because of a shortcoming in compiling grant-related expenditure or simply because of mistakes by the computer at the Department of Environment—rather, the two computer systems, which keep a watchful eye on each other but sometimes succeed in doubling the mistakes. Some of the work has been done on computers in Cleveland, Ohio and Rockville, Connecticut. It may be that the calculations were made in United States dollars. That would be as rational an explanation as I have heard for what has taken place.
Be that as it may, the results are very serious. The hon. Member for Birmingham, Selly Oak (Mr. Beaumont-Dark) raised the question of the impact on the police of what the Secretary of State is doing and the reply by the Secretary of State was grievously inadequate for those concerned about the matter. My right hon. Friend the Member for Manchester, Wythenshawe (Mr. Morris), in his intervention referred to the inability of local authorities to meet their legal duties under the Chronically Sick and Disabled Persons Act. For example, in Liverpool nearly 400 severely disabled people have been put on an indefinite waiting list for telephones, which social services Ministers have said is illegal. Liverpool's defence is that that has been caused by the Secretary of State's cuts. Councillor Anthony Mogford, the chairman of the policy committee of Buckinghamshire county council, claims that his council's loss of £12.5 million in rate support grant for 1982–83 is due to the failure of the system to take account of the recent population growth. When the Secretary of State purported to reply to a question from the hon. Member for Buckingham (Mr. Benyon), he offered no immediate comfort for that county.
My hon. Friend the Member for Rother Valley (Mr. Hardy) told me that Rotherham, which was an underspender last year, will suffer a loss in grant of at least 8 per cent. in 1982–83, purely because of the Government's artificially low assumption for inflation. Yet the Secretary of State had the nerve today to pay Rotherham a compliment. Birmingham had its grant-related expenditure assessment reduced between 21 December 1981 and 25 January 1982 by £l.l million, which could mean a loss of grant of £2.3 million. The Minister for Local Government and Environmental Services, in a letter to the leader of Birmingham city council, offered the following explanation:
the reason for the change lies in the correction of an error in the information we use to make an assessment of the component of GRE in relation to land drainage".
The fate of jobs and services depends on such nonsenses.
The most extreme example is that of Thurrock in Essex. That bewildered local authority finds that, at a stroke, it will lose every penny of its grant in the forthcoming financial year. That is largely because its rate support grant allowance for housing revenue account deficit has been wiped out. That is a manifestation of the Secretary of State's gratitude to Thurrock for doing what he asked, and raising rents by the level that he laid down. Thurrock's grant loss will bring about a rates increase of 40 per cent. That council is the victim of the Department of the Environment failing to understand its own methodology.


No doubt the Secretary of State will take an early opportunity to denounce the high spending policies of Thurrock borough council.
Raising rents is not the only Government policy that councils are being punished for obeying. Authorities will also lose grant as a result of the additional income they obtain from selling council houses. In addition, the greater the number of council houses they sell, the more grant they will lose. They are also punished because the Secretary of State will not let them build new houses to replace those that he is forcing them to sell. Under the GRE assessment house starts indicator, grant entitlement is chalked up on the basis of the number of new houses begun in an area. Yet the Government's housing policy is drastically reducing the number of new starts year by year. Far from increasing the housing investment allocation programme, as the Secretary of State claimed this afternoon, he has cut it by 4 per cent., which is based on a phoney 8.9 per cent. inflation rate. On the proper inflation rate, the cut in housing investment is far greater, and local authorities will be penalised for that by reduced rate support grant.
There are other curiosities in the way that the mysterious GRE assessments are compiled. For example, grants for concessionary fares for the elderly are based not on the number of elderly who may benefit, but on the number who live in an area. Therefore, an area that deprives its elderly of cheap transport is rewarded by the Secretary of State. Not only do local authorities gain or lose almost at random on the basis of their allotted GRE assessments, they suffer from a new refinement in the calculation of their grant-related poundage. Hon. Members will recall that the key element in the calculation of a local authority's block grant is its grant-related poundage. In the rate support grant report, every class of authority is allocated a GRP. That is multiplied by the rateable value for the area, and the product of that calculation is subject to the multiplier allocated individually to each council. The result of that calculation is deducted from the local authority's total expenditure, and what remains is the block grant.
One element in the GRP is the tariff, otherwise known as the slope. For each additional £10 per head of expenditure below the threshold above its GREA, a local authority is required to raise an additional sum in rates. Last year the tariff was 5.6p. This year the Secretary of State has steepened the slope by increasing it to 6p. That may not sound a great deal, but it is a 7 per cent. increase. That penalty is imposed on local authorities even when they are spending below what the Secretary of State tells them they need to spend to provide the services that their area requires. Of course, that penalty increases even more when they spend above the threshold and the taper comes into operation.
But those penalties are as nothing compared with the punishment that the Secretary of State is imposing on local authorities that are spending above his expenditure targets. This is where Sherlock Holmes appears on the scene. Students of Conan Doyle will remember the exchange of dialogue between Holmes and Dr. Watson in the story "Silver Blaze". The detective refers to
the curious incident of the dog in the nighttime.
Watson comments:
The dog did nothing in the nighttime.
Holmes remarks:
That was the curious incident.

We are debating one rate support grant order, one rate support grant report and one rate support grant supplementary report. In addition to the one supplementary report, which makes certain non-controversial changes following last year's main report, we should be debating another supplementary report to impose the penalties threatened by the Secretary of State when he was conducting his holdback operation last summer—the exercise in which, last June, he ordered local authorities to cut their budgets by 5.6 per cent. below their expenditure for the financial year 1978–79.
At that time, the right hon. Gentleman warned that councils that failed to make the demanded cuts by the end of July would be visited by the most stringent punishment in the form of reduced grant, called "holdback" in the Secretary of State's quaint but sinister phraseology. One hundred and seventy five local authorities failed to do as they were told. The Secretary of State let off 61 of them with a caution, having discovered the irrelevant but extenuating circumstance that they were budgeting below their GRE assessment, even though they were still spending above their target by an aggregate of more than £70 million. That left 114 authorities cowering under the expected lash of the Secretary of State's holdback penalties. But the lash has not fallen—the grant has not been docked. The dog has done nothing in the night time.
There is a simple reason for that, but we would never guess it from the way in which the Secretary of State glossed over the matter in his speech. He has discovered that that holdback operation—targets, penalties and all—is illegal. As he reminded us today, he has already been taken to court once by local authorities from which he withheld grants unlawfully. We shall have to study carefully the text of his belated announcement today. It is clear that he is afraid to risk being labelled a wrongdoer by another set of judges.
The game is given away in paragraph 9 of the main rate support grant report that we are debating today. It says:
Clause 4 of the Local Government Finance (No. 2) Bill currently before Parliament is intended to clarify the powers under which such a scheme could be operated.
What a nice word "clarify" is! In the dictionary of Heseltinese the definition of "clarify" is "retrospectively make lawful that which was unlawful". Clause 4 of the Local Government Finance (No. 2) Bill, row in Committee, seeks to achieve that clarification by legalising retrospectively both the illegal targets that the Secretary of State set and the illegal penalties that he threatened. The Minister for Local Government and Environmental Services confessed that until the local Government Finance (No. 2) Bill is passed, it will not be proper for the Government to impose the penalties.
So there we have it. The Secretary of State, who lectures local authorities about the need to conduct themselves lawfully, has been conducting himself unlawfully ever since last June. If he were not a Minister of the Crown with an obedient majority ready to bail him out, he would by now be helping the police with their inquiries.
However, the Secretary of State's lack of legal authority to penalise those whom he has categorised as overspenders saved him from some embarrassment last weekend. Two days ago, the Secretary of State made again his now familiar speech about his determination to reduce local authority spending. He said:
I am unrepentant about the need for economies.


He made his speech at the Young Conservatives' annual conference. The conference was held in Harrogate. Under the Secretary of State's holdback exercise, Conservative-controlled Harrogate emerged as the second worst overspender of all England's 411 local authorities. The reason why Harrogate has so blatantly contravened the Secretary of State's edicts is that it has been spending vast amounts of ratepayers' money on a grandiose new conference centre. The Secretary of State made his speech attacking local authority extravagance in that same grandiose conference centre, which has turned Harrogate into the second most extravagant local authority in England.
Indeed, the Young Conservative conference was the first major event in that conference centre. There is only one reason why the Secretary of State has not yet fined Harrogate £313, 000 in grant holdback for building the conference centre in which he denounced such extravagance as building the conference centre in which he was delivering his denunciation. The reason is that the penalty is still illegal, and will remain so until Parliament retrospectively legalises it.
The Secretary of State has now changed the whole basis on which he calculated the targets by which overspending will be judged for the forthcoming financial year. During the Second Reading of the Local Government Finance (No. 2) Bill, I mentioned the methods by which the new targets were assessed. Some brows were furrowed when I said that the final stage in the construction of the targets involves the iterative process. So hon. Members will be relieved to learn that in a handy guide just issued, the Association of Metropolitan Authorities has provided a definition of that iterative process, namely, 
required to he calculated over and over again until the right answer appears.
The targets are so sweeping that they indict 365 of the 411 English local authorities as overspenders. That iterative process, far from being fair, as the Secretary of State claimed this afternoon, has led to some serious anomalies, one of them resulting from the rule that no local authority is required to make cuts of more than 7 per cent. from this year's budget. I hasten to add that those anomalies do not affect Harrogate. Just as it is a maximum overspender in the current financial year, so it would be a maximum overspender in the new financial year. That conference centre is an expensive item.
Other authorities are even less lucky than Harrogate. On the other hand, certain councils are much luckier. Let us take Portsmouth and Northamptonshire. In last year's drive for economies, Portsmouth did everything for which the Secretary of State could hope. Obeying his legal instructions, it cut its budget by £669, 000. Those cuts turned Portsmouth into the apple of the Secretary of State's eye—an underspender. However, under his idiosyncratic system of rewards and penalties, he recompensed Portsmouth for its frugality by reducing its rate support grant by £333, 000. That is bad enough, but worse is to come. This year, on precisely the same budget that last year made it an underspender, Portsmouth becomes a maximum overspender. It is being made to cut its budget by the 7 per cent. maximum to avoid penalty. The final turn of the screw is that if Portsmouth had not cut its budget last year in response to the Secretary of State's illegal demands, it would now be called upon to cut 7 per

cent. only from its original, higher budget, rather than from its reduced budget. So Portsmouth loses four ways: it made cuts last year; it was penalised for doing so; it is being ordered to make maximum cuts this year; and its required cuts are higher as a direct result of the cuts that it made last year.
Letus contrast Portsmouth's agony with Northamptonshire's good fortune. Last year, Northamptonshire completely ignored the Secretary of State's call for cuts. Instead, it increased its budget by £5, 705, 000. The Secretary of State responded smartly by increasing Northamptonshire's grant by £3, 810, 000. This year, it is true that Northamptonshire is an overspender and is due to be penalised—but by only 3.8 per cent. That is half the penalty hanging over virtuous Portsmouth.
Anomalies of that kind can be repeated all over the country. They stem from a series of absurdities—the absurdity of the system by which last year's grant was awarded; the absurdity of last year's illegal spending targets; the absurdity of last year's illegal penalties; the absurdity governing the award of this year's block grant; and the crowning absurdity of this year's penalties.

Sir Julian Ridsdale: (Harwich)rose——

Mr. Kaufman: I hope that the hon. Gentleman will forgive me for not giving way, because I am coming to the end of my remarks. The Secretary of State took so long that I want to make a short speech, by comparison.
It is no wonder that the Secretary of State is tired of the whole wretched business. It is no wonder that he is desperate to reform the whole rating system. This week, The Sunday Times revealed details of the top secret, almost occult, Cabinet meeting that was held a fortnight ago to discuss the rates—a meeting that was so secret that only several journalists obtained full details of it. It turns out that the Secretary of State has been compelled by the Prime Minister to bring before the House policies in which he does not believe. As The Sunday Times put it:
When he was looking for ways to tame spendthrift local authorities last year, one method he rejected was the local referendum. Yet over his strong objections, that is the method the cabinet chose. He was therefore saddled with defending a policy he thought both wrong and unpopular … Later, Conservative MPs proved his judgment right by forcing the government to withdraw its referendum proposal.
Not only do we disagree with what the Secretary of State is doing, but the Secretary of State himself disagrees with what the Secretary of State is doing.

Mr. Ted Graham: Have a referendum.

Mr. Kaufman: The trouble is that there was a referendum in the Cabinet and the Secretary of State lost. If we defeat the Secretary of State in the vote tonight, by imposing on him what appears to be a public humiliation, we shall provide him with a private triumph. Therefore, I not only invite the Secretary of State's sadly numerous enemies, but also whatever friends he may have, to join us in the Lobby tonight to throw out this wretched, illogical, unfair and mean-minded rate support grant settlement.

Mr. Mark Carlisle: It would be churlish to pretend that one had not enjoyed some of the wit and amusement of the right hon. Member for Manchester, Ardwick (Mr. K aufman). He rightly pointed out—if he is right in the figures that he gave—many of the apparent anomalies in the rate support grant. I am bound to say, 


however, that over the past 14 years, many similar speeches have been made by Opposition Members in debates on the rate support grant, pointing out various anomalies in division of the money.
Although the right hon. Member for Ardwick is not normally given to generosity towards Conservative Members, he may agree that the real point thrown up by his wit and humour is the genuine complexity of the rate support grant. The rate support grant is understood by my right hon. Friend the Secretary of State and by my right hon. Friend the Minister for Local Government and Environmental Services, but it is otherwise understood by only one official in the Department of the Environment, one official in the Department of Education and Science and by the Department of the Environment's computer. However, as we heard, there is a certain doubt about the computer.
This is the first time that I have addressed the House in a general debate since being dropped from the Government last summer. I am grateful to you, Mr. Deputy Speaker, for calling me. In a debate on the rate support grant and local authority expenditure, it is important to remember that a high proportion of that expenditure goes on education. Any debate, therefore, on the funding of local authorities, or on the level of the rate support grant that goes towards the funding of local authority expenditure is bound to have an important effect on education throughout the country. I am not talking only about education in schools. It is worth remembering that local authorities are responsible not only for the education of those of compulsory school age, but also for the education of children under five, of those between the ages of 16 and 18 who wish to stay in full-time education, and for the whole of higher and further education, with the exception of the university sector.
As I said, the rate support grant is a complicated piece of machinery. I do not want to become involved in its complexities now, or in arguments about the effect of any particular grant on an area. I should like to make what I believe are, if over-simplistic, at least straightforward points concerning our approach to the debate.The first point is self-evident and was highlighted in the speech of my right hon. Friend the Secretary of State. In a period of recession, rate increases are placing a heavier and heavier burden both on individuals and on industry and many people are becoming greatly concerned. It is worth remembering that when debating the rate support grant we are debating one quarter of all public expenditure. The types of rate increases that we have seen in recent years—and those that some incoming Labour-controlled county councils have imposed in the past 12 months—are making a substantial impact on the viability of many small industries and businesses and, thereby, on unemployment.
More than half the rate-borne part of expenditure is paid not by the domestic ratepayer but by local industry. That is probably the most classic case of taxation without representation. If we tax or rate small businesses in a way that prevents them from expanding or, in some cases, drives them out of business, we shall increase and aggravate our unemployment problems. The Government must have an overall view about the use of the country's resources. They must take responsibility for the macro economic decisions. I totally support my right hon. Friend and the Government. They are wholly right in doing all in their power to restrain the level of local authority

expenditure. However, I am sure that my right hon. Friend will agree that expenditure must be commensurate with the provision of adequate services.
My right hon. Friend is right to do all that he can to attack individual spendthrift councils. The Government's critics say not that his attacks have been too successful, but that they may not have been successful enough. Therefore, I am in accord with the basic principle behind the Government's approach. I do not believe—as some members of the public might argue—that education can be excluded from any savings to be made in local authority expenditure. By its very volume, expenditure on education must be part of any attempt to constrain local authority spending. It takes up four times the amount of any other local authority service. At £9, 190 million in the coming year, expenditure on education represents more than half of all local authority current expenditure. It represents about 70 per cent. of the total expenditure of those authorities that are local education authorities.
Of course, it is vital that the country should provide the best education service possible at school, pre-school and post-school age. However, we all know that ultimately the standard of education is not entirely related to expenditure. Other matters must be taken into account. As I have said before, those who criticise the Government for their efforts to restrain such expenditure do not benefit today's schoolchildren, because if we spend more than we can afford on education we may leave them to face even greater economic problems in the future.
Therefore, I believe that it was right to examine education expenditure as we have over the past two and a half years. I ask those who criticise what the Government have been trying to achieve to have a sense of proportion. It is right that we have reduced public expenditure on education. We were aiming to spend 31/2 per cent. less in 1981–82 than in 1978–79, for a further fall of 1 per cent. in the coming year and 6½ per cent. less in 1983–84.
We must remember that those figures are being aimed at and largely achieved against a fall in the number of pupils which is substantially greater. That fall is 7 per cent. from the date of the Government's coming to office to the present day and it will be 13 per cent. by the end of 1984. That means that, despite the genuine savings that have been made, we have today a higher pupil-teacher ratio, and are likely to continue to have one when the 1982 figures are available, than we have ever had before. It is certainly considerably better than it was in 1978 and 1979.
Planning for a reduction is always difficult. l realise that there are diseconomies of scale that are bound to affect the savings made. I support the comment of my right hon. Friend the Secretary of State that the targets that had been set to local government in this area, although tough, were attainable. It would be impossible to go further than we have and I would resist any attempt to make further savings in education.
How successful have we been in making those reductions? Again, it is worth pointing out that, compared with local authority expenditure as a whole, education authorities have been considerably more successful in achieving the reduced expenditure targets than other areas of local authority expenditure. If one examines the outfall for 1980–81, one sees that, apart from an increase in overspend on school meals, the outfall for the rest of education expenditure was equivalent to the relevant expenditure. I dare to predict that for 1981–82 the outcome


overall will show again that the expenditure is roughly equivalent to that which was allowed for in relevant expenditure.
About 80 to 85 per cent. of the reduction in local authority manpower has been achieved by local education authorities, largely in non-teaching costs. If one could convey to local authorities the need to examine some of their other services, particularly local administrative services, and if they compared that with the way some local education authorities have examined their expenditure, which is a highly politically sensitive area, they would find it easier to achieve many of the targets set by my right hon. Friend.
Therefore, faced by the overspend, my right hon. Friend is right to say that he is carrying through his threat to withhold grant for 1980–81, because he has no alternative. At the moment, it is the only method he has for controlling the total resources that may be used. It is the only method he has for bringing to the notice of local ratepayers the effects of the extravagance of individual local authorities. He is right to make it clear that he intends to withhold grant in 1981–82 from the individual authorities that continue to overspend.
While I take the point of the right hon. Member for Ardwick about the Local Government Finance (No. 2) Bill, I should have thought that it was a substantial step forward that my right hon. Friend and the Government were putting on the statute book legislation that allowed them to pursue an overspending individual authority rather than having to suffer the sins of the few at the cost of the many.
My right hon. Friend the Secretary of State must be clear what is meant by overspending. I do not believe that we can simply look at historical levels and say that every authority—I shall take some figures used by my right hon. Friend—that has not spent 5.6 per cent. below its 1978–79 expenditure is, ex hypothesi, an overspender. As he will agree, that is not so.
In many aspects of local authority expenditure the overall responsibility of a Government is primarily financial and they aim to keep down local authority expenditure. However, with regard to education expenditure, the Government are bound to have an interest not only in the level of expenditure and the cost of the service but in the standard of the service that is provided.
Largely thanks to the energy of my right hon. Friend, today we have a system of assessing the needs of local authorities which is far more sophisticated than past systems, and the level of grant-related expenditure of each authority. I know that the system is not perfect. No system is perfect. I am sure that an amusing and witty speech could be made by the right hon. Member for Ardwick pointing out the fallacies and individual problems of grant-related expenditure.
In the end grant-related expenditure is based on calculations that contain a series of ingredients that have largely been accepted by the Association of Metropolitan Authorities and the Association of County Councils as taking account of the needs of spending in an area. In education, I can say without fear of contradiction that those ingredients were set not by the Department of the Environment but by the Department of Education and Science. I was glad to hear my right hon. Friend say that

some changes had been made this year which I know were being looked at in conjuction with the other partners—the AMA and the ACC.
As we have grant-related expenditure, and as grant-related expenditure is not the same as historic levels of expenditure, it is nonsense to suggest that authorities that may not be spending 5.6 per cent. below the 1978–79 level, yet are spending at or below the level of grant-related expenditure, are overspenders, whereas those that have achieved the 5.6 per cent. target are not overspenders, even if they are still well above the level of grant-related expenditure. That appeared to apply to many shire counties. That is why I welcome the statement made by my right hon. Friend in the latter part of last year, reaffirmed in the Rate Support Grant Supplementary Report (England) 1982, that those authorities whose expenditure is below the GRE should be exempt from penalties, even if expenditure is above the 5.6 per cent. figure.
I should have thought that the quicker we broke away from the system of judging local authorities on historic expenditure lines as a means of assessing Government help, the better. The sooner we move over to a system of relating that help to grant-related expenditure based on an assessment of needs the better. The block grant provisions in the Local Government Finance (No. 2) Bill allow us to work in that way.
To some extent, there will always be a clash, which GRE will avoid, between the overall view of the Government, who are concerned with the general level of expenditure of local authorities, and a particular view of a Department such as the Department of Education and Science, which, because of the nature and importance of education, is bound to be concerned about the standard of that service.
Will my right hon. Friend the Minister for Local Government and Environmental Services explain—I do not doubt the efforts of my right hon. Friend to do so—the relationship between target levels of expenditure and GRE for 1982–83? I understand that they are different. I am glad that the right hon. Member for Ardwick signifies his agreement with me on that. I think that my right hon. Friend said that before a penalty was exacted local authorities would have to fail on both levels—target and GRE. That is important.
Having made what I hope my right hon. Friend will feel are many remarks supportive of the proposals, I must continue by expressing my anxiety about the Government's intention to reduce the RSG from 59.1 per cent. to 56.1 per cent. this year. I believe that the reduction is likely to have a grave impact on rates, given the public nature of many local authority services although I fully understand the reasons behind the thinking of my right hon. Friend and his Cabinet colleagues in coming to that decision.
I realise that at the back of my right hon. Friend's thinking must be the thought that if local authorities are made responsible for a higher proportion of the money which they spend they will be more accountable and will be forced to be more careful with the money they spend. In other words, the effect will be a squeeze upon them. I thought that the right hon. Member for Ardwick was a little unkind to imply that my right hon. Friend had misled the House with the figures that he gave today. When the right hon. Gentleman gave his figures for the cash reduction in RSG for the coming year, I thought that that


was the total of the reduction from 59.1 per cent. to 56.1 per cent. and the reduction in volume to which my right hon. Friend had referred. The right hon. Gentleman assisted the House with mathematics rather than revealed any deliberate attempt to evade responsibility for the figures which emerged.
The only way to consider the Government's proposed reduction from 59.1 per cent. to 56.1 per cent. is to see it, as I am sure is the intention, as a further restraining influence. I remind my right hon. Friend and the House that there are already two squeezes working on local authorities. The first, which I welcome, is the volume reduction in expenditure which the Government are attempting to achieve. The second is the tough approach to inflation assumptions in the coming rate support grant. I agree with what the Government have done. They are absolutely right to make an assumption on pay which is hard of achievement. Those who maintain that 4 per cent. is totally unrealistic and the teaching profession generally should remember that since the Government came to office in 1979 teachers' salaries have increased by 58 per cent. as a result of the Clegg award and the later assessment. A 4 per cent. limit is now legitimate and right. I remind those involved in teaching that, to a large extent, despite the inevitable reduction in the number of pupils, they have greater job security and job satisfaction than many people in the private sector.
As a result of the two forms of squeeze that I have mentioned, the only practical effect of reducing the RSG from 59.1 per cent. to 56.1 per cent. will be a transfer of expenditure from central Government to the rates. That in itself will mean a 5 per cent. increase to pay for the assumed new levels of expenditure. To that extent, therefore, the Government are being over-optimistic if they believe that the reduction from 59.1 per cent. to 56–1 per cent. in rate support grant will achieve a further reduction in local authority expenditure. Certainly it will not be possible in education. Indeed, I believe that authorities which attempt to achieve it will probably be those which have always done their best to run a tight service and are therefore least able to achieve it and most likely to suffer damage to services as a result.
I understand the reasons behind the proposals, but it is a pity that the rate support grant has been reduced in this way because in practice it will mean a transfer of expenditure on to rates which is contrary to the direction in which we should be going at a time when rates are attacked for falling unduly hard on industry, households and private businesses.
My final point relates to the future. It is no good criticising the rating system or the level of rate support grant unless one is prepared to say what, if anything, should be done about it. Again, my right hon. Friend is to be congratulated, as is my right hon. Friend the Minister for Local Government and Environmental Services, on the Government's great initiative in inviting public comment on alternatives to the rating system.
It is easy to criticise the rating system for not adequately representing people's ability to pay, the number of people in each household or the extent to which services are used. Nevertheless, it has some advantages, one of which is ease and cheapness of collection. Speaking purely for myself, I cannot pretend to be enamoured of the alternatives set out in the Green Paper. If we are serious in reacting with concern to the burden of rates on small businesses and individuals, we must try to reduce the proportion of

expenditure collected through rates. Realistically. the only area in which that could be done is that of education expenditure.

Mr. Christopher Price: The right hon. and learned Gentleman has criticised the Green Paper. Does he agree that the appendix to it was prepared under his own stewardship and suggests taking teachers' salaries out of the rate support grant altogether?

Mr. Carlisle: I shall limit myself to saying that the date of the Green Paper is December last year. However, I was about to say that I happen to agree with the views stated in the appendix or at least that they deserve further thought.
I believe that there is a case for transferring a far greater proportion of education expenditure to central Government. This could be done in two ways. Teachers' pay could be taken out and put on to central Government. It should be remembered that for most county and metropolitan districts staffing costs represent 70 per cent. of the education budget and teaching staff alone 50 per cent. of the budget. Alternatively, a specific block rant for education could be provided related to grant-related expenditure for the area.
I realise that the second proposal would affect the present relationship between the Department of Education and Science and local education authorities, but that would not necessarily be undesirable. The very fact that local authority expenditure cannot at present be hypothecated means that the Department cannot ensure that money will be spent in the way that one might wish it to be spent. Indeed, there is confirmation of that.
In recent months and years there have been substantially different levels of provision in different geographical areas. A fair description of the Secretary of State for Education and Science is that he is the reverse harlot of the ages. He must take responsibility for what lie has done in education, although he has very little or no power. Therefore, something which changes the relationship between local education authorities and his Department would not necessarily be undesirable. It would not mean that we would have to do away with all local authority control in education. I certainly do not believe that taking greater financial control centrally would mean local education authorities giving up their right to choose the types of schools in their areas.
We have a system of grant-related expenditure. It would be possible to pay to that level or, better still, to pay to about 90 per cent. of it on a direct grant with any decision above that level having to be met by the local authority out of its ratepayers' pockets. One could then achieve a method of financing education which could live alongside the existing local education authorities with their interest and involvement in education, while at the same time reducing the level of expenditure on the rates, without encouraging financial irresponsibility by the authorities. I very much hope that before next year's rate support grant further thought will be given to this matter.

Mr. Stephen Ross: I congratulate the right hon. and learned Member for Runcorn (Mr. Carlisle) on his realistic attitude to what is likely to happen on rating reform. So much hot air has been talked and political publicity made out of the whole question of changing the


rating system that it is only when one gets down to deciding how to improve matters that the subject becomes more complicated. I should prefer to do something more on the lines he suggested than, say, a poll tax, which I gather is the present front option.
This debate is occurring very late in the day. We on the Isle of Wight approved our budget today. I suppose that if the Government are defeated tonight, we could be in some trouble. I made my speech, got the proposal through this morning, and here I am this afternoon debating the grant order.
I am worried about the Secretary of State's announcement, although I know it appeared in the supplementary order, of his withholding about £116 million on the rate increase order, which presumably will affect councils' budgets in a form of clawback. Am I not right?

Mr. Heseltine: The hon. Gentleman will obviously want me to consider any specific question and I shall do that immediately and urgently. I was confirming announcements about which treasurers will be fully aware.

Mr. Ross: I am grateful for that comment, but I am not sure whether the treasurers were aware of it before 28 January. If they were, I shall leave it at that. I am relieved, because I did not want to face changing matters again.
I never opposed the present Administration's change in the formula, and if one considers the record that will be confirmed. Although I believe it was well intended, I never felt that the formula introduced early in 1974—which was a genuine attempt by the previous Conservative Administration to give more money to inner cities—ever worked to my local authority's advantage or many others. The right hon. Member for Manchester, Ardwick (Mr. Kaufman) commented on that aspect, but the same criticisms might be levelled at the previous Labour Administration.
The old formula took the wrong grant base, penalised the thrifty and encouraged overspending. Therefore, I thought that the Government were entitled to change it and to introduce the block grant. My authority's position was improved by the block grant. It is somewhat difficult to talk against it, because it has certainly been a great relief to us.
The transport supplementary grant which we received this year has been generous, and I suspect that other authorities have been similarly treated. We certainly are grateful for it. However, it is a complicated formula and it contains a whole range of new jargon: "claw-backs", "holdbacks" and "super holdbacks". We are supposed to lie back and enjoy the "super holdbacks", but I still do not understand them.
It was rightly stated that many authorities have experienced some pretty odd results. The formula is not yet right.
The right hon. and learned Member for Runcorn referred to the reduction of the rate support grant from 59.1 to 56 per cent. As he rightly said, that places a greater burden on local authorities. In my constituency, it means an automatic rate increase of 5.94p. That sum is required to make up the balance from our rates. I would not object to the shift of grants from central to local level if only the Government would give it more publicity, say what they have done and explain it to our ratepayers.
I want local authorities, if possible, to raise more of their own finance, so long as they are given greater jurisdiction on how that money is spent. My main complaint against the Government is the continual denigration of local authorities, nearly all of which is undeserved. The general public, of course, tend to believe what they hear and read and it makes the lives of officers and elected members much more difficult and often unenviable. If one wants people to give up time to stand and serve on local authorities, we are not now going about it in the right way.
Another in word is "privatisation". Many Conservative councillors and their supporters at public meetings say "Why not privatise this, that and the other?." There are cases when privatisation can be made to work, but there is nothing wrong with an efficiently managed public service. It is about time that that was also said in the House, because some of our public services are extremely well run and will not improve by being privatised.
The rate support grant settlement this year, as previously, contains an unrealistic allowance for inflation and wage increases. That fact should also be appreciated when local authorities make rate assessments. We have allowed 7.5 per cent. for inflation and the settlement allows 9 per cent., which is, of course, well below the current rate. Individual councillors have virtually no say on wage settlements, and certainly not on educational salaries. It is not good enough to tell them it is all in their hands. It may be in the hands of appointees from the ACC or AMA, but we know that we have no say in determining the level of the wage settlement. Nevertheless, we must pick up the bill at the end of the day. That is a very good reason why teachers' salaries ought to be decided and paid by central Government.
The Secretary of State wants local authorities to issue reports on almost every subject of expenditure under the sun. He must be a little more careful and fairer when quoting comparisons between authorities. There are often good reasons for such differences.
Taking a headage count, as appeared in my local newspaper recently, the numbers at county hall, it was claimed, had risen by about 50. That figure was levelled at me at almost every public meeting I subsequently attended. However, our employees actually decreased between March and December by 53. It depends on the day the count is taken, how many people may be in the office, away through illness or are part-time workers on that day. It is easy to use some of these statistics and create a misleading story.
The main complaint at our rate fixing this morning came from the leader of the Conservative group describing the amount of paper work. He complained bitterly about all the paper work involved with primary schools—he said that he was a governor of such a school—setting out the rights of parents and individuals about the appeal system and other aspects. We had to tell him that the Education Act 1981 introduced the requirement. It is burdensome for local authorities and it adds to their costs. However, it is right that parents and others should have more say in the way in which schools are run and the complaint system. They should be able to make representations that their children should go to a particular school, for example.
However, when the Government introduce these requirements, they should have the generosity to explain that a duty has been imposed on local authorities by central Government that they are expected to carry out and that


the procedure will be more burdensome and will involve extra paper work to ensure that it is carried out properly. If the requirement is not observed, undoubtedly someone will complain to the ombudsman, which will present a further burden.
My general complaint against the Government is their attitude to housing. Hon. Members will do well to read the third leader in The Times today. We are having yet more rent increases for still poorer services. The bad odour for this falls on the unfortunate housing authorities and the party that is in office, whether Tory, Labour or Liberal. If the party that is in office is increasing the rents, tenants will consider that it is the fault of the council down the road. The Government's housing policies are a disgrace, and I do not know when we shall be able to put them right. It will take a long time to do so.
It is the reported intention of the Secretary of State to limit the expenditure of local authorities on unemployment initiatives to a halfpenny rate. That will be a monstrous imposition. Councillors with any gumption must surely be allowed the opportunity to have more flexibility than that. They are in a position to know better what needs to be done. Local councils will not produce schemes that are contrary to Government policy. They will not come up with schemes that will cost umpteen million pounds, but there are smaller things that they can do. A halfpenny rate on the Isle of Wight would produce only £65, 000 or £70, 000. That would be a flea bite. We want desperately to take more initiatives to help those out of work.
Representatives of the Confederation of Shipbuilding and Engineering Unions met me last night to discuss the 14.2 per cent. unemployment rate on the Isle of Wight. We are not an assisted area. The confederation expects the local authority to do more and the authority wants to do more, even if that is only putting on extra education classes at our technical college.
It is to be expected that any Government who meet over half the cost of local authority services will expect to have a major say in how much taxpayers' money is spent and on what. The argument between central Government and local authorities appears to centre on whether the Government should have control over the portion that is provided by ratepayers. I believe that local communities need local government and should want to keep it. I think that it is their wish to retain it. If they learn that they are about to lose it, they will be profoundly disturbed.
I am concerned at the progressive erosion of local government sovereignty in the name of Government macro-economic control. Whitehall bureaucrats worry me a darned sight more than county hall bureaucrats, and the Whitehall bureaucrats have been far less successful in managing their budgets than those at the county hall.
The Liberal Party has no wish to place unnecessary burdens on ratepayers, whether domestic, commercial or industrial. In my constituency, we shall endeavour to keep within the Secretary of State's limits. The authority in my constituency has laid it down clearly and flatly that it will stay within the GRE. I am delighted that the right hon. Gentleman has confirmed that there will not be any holdback on those who stay within the GREs. It is inevitable that there will be clawback. The authority on the Isle of Wight does not know the extent of the clawback and it has had to provide adequate resources and balances to meet it when it comes. The authority has come up with an

11.9 per cent. rate increase, which will put it into the lowest third of English and Welsh counties, but that means a standstill budget.

Mr. Heseltine: Perhaps the hon. Gentleman did not hear what I said about clawback. As he has talked about coming to decisions and making provision for clawback, it is important that he should read carefully what said in my opening statement. From what we see of the budgeting of local authorities, it is our view that clawback will be low.

Mr. Ross: I am delighted to hear that, but that is what we were told a year ago. I am a member of the Local Government Finance (No. 2) Bill Committee. When I asked the right hon. Gentleman's ministerial colleague about this issue, he said "Yes, there will be clawback." There is good reason to complain that this news is corning very late. I am sure that authorities other than ours on the Isle of Wight have already announced their budgets. My authority will have to live with its budget now. As I have said, it will mean a standstill budget and a restricted capital programme. I think that there is only one major project. This will not be good news for contractors who are desperately looking for business.
I become rather tired when I hear the constant pleas made from the Tory Benches to relieve the "unfair" burden that commerce and industry have to bear. I own two shops and am a ratepayer. I do not believe that Tory Members' claims are fully justified. I am sure that it is possible to select areas in which there have been huge rate increases. I am not saying that there has not been suffering in those areas. I agree that there are exceptions. However, do not believe that the burden has fallen unfairly on commerce and industry. Just look at current rents arid rate assessments before complaining. It is infuriating that those who shout the loudest are most often those who are demanding improved services.
If the Government want to do something for industry—I am sure that they do—surely they should introduce some measure of derating, which still applies in Scotland and now in the enterprise zones. It is the continuing denigration of local government and not so much the extraordinary vagaries of the rate support grant, which. I fear will be with us for much longer, that leads me to support the Opposition, and I shall do so when the Division is called. It is time that we heard more support for local government from the Government Benches.

Mr. Nicholas Lyell: I am glad to take part in this important debate on what is a complicated but highly significant subject for the whole of Hertfordshire. I am glad to say that in large measure my remarks will have the support of my right hon. arid hon. Friends who represent the other constituencies in the county.
I shall make some general comments about our overall rate support grant settlement and some detailed remarks about grant-related expenditure, our constantly falling grant, the potential effects—in the light of what my right hon. Friend the Secretary of State has said, I am happy to be able to say "potential"—of clawback, and about the adverse results that we suffer as a result of our high rateable values.
In opening such a speech one is conscious of using a good deal of jargon, and some might think gobbledegook, 


but so technical is the subject that it is essential that anyone who plays an active part in fighting the rate support grant battle for his county or district has to become learned in this sort of necromancy.
I recognise the background to the Government's actions and I fully support what they are trying to do. No one can fail to realise the importance of controlling the consistent overspending that has taken place over the past 10, 15, 20, even 25 years. It was much higher overspending when the previous Labour Government were in office but the Government must tackle the overspending that is still taking place.
Over the past year there has been overspending of about 10 per cent. on the Government's income and that is represented by excessive borrowing in the whole public sector. One cannot overlook the effect of that on inflation, on our competitiveness and, therefore, on the long-term interests of our children with whose future we are so deeply concerned. That will be especially so when I discuss the effect on education of the rate support grant settlement in Hertfordshire. I am entirely behind what the Government are seeking to do to control spending. In seeking control we cannot overlook the fact that local government expenditure, including education spending, is about 25 per cent. of all public spending.
We have some significant problems in Hertfordshire this year arising from the outcome of the rate support grant. I do not suggest that they are our problems alone, or that they cannot be overcome. We shall, however need good-will and help from all influential quarters—from the county council, which has to make difficult budget decisions following the reductions; from those in the education sector whose approach and whose wage and salary levels affect spending so much; and, above all, from the Government, who have to set up and to implement a fair and satisfactory system. I value the discussions that I have had with educationists throughout the county and I shall say more about them later.
I shall summarise Hertfordshire's problems. The county has practically the smallest grant-related expenditure increase of any of the shire counties—about 5.6 per cent. It is within that increase that one has to try to pack the desire for services and spending against a background of inflation in the wages and general sectors.
Hertfordshire has almost the largest loss of grant of any shire county—6.8 per cent. Surrey is the only county that fares worse. Hertfordshire has one of the highest average domestic rate payments. That is an important point. Domestic and business ratepayers in Hertfordshire pay a higher proportion of the total county spending bill than in almost any other county. They have to meet between 57 per cent. and 60 per cent. of the total bill. Although the overall levels of spending are being cut this year, the substantial loss of grant means that rate increases of at least 13.6 per cent. will have to be met.
We in Hertford shire recognise, as my right hon. Friend has pointed out to us in helpful discussions, that the county is a high spender on education. It is a high spender by choice. That choice was not made in the past few years. It has been established by a Conservative-controlled county council over the past 20 years. We believe in high spending on education, not for itself but for what it provides. I am grateful to note that Opposition Members are nodding. But we are not excessively high spenders

overall. We have our priorities right. Our spending on education is 13 per cent. above average. I know, Mr. Speaker, that you will approve of that. But our overall spending is only 31/2 per cent. above average, and our spending on refuse collection is 18 per cent. below average. That represents a proper sense of priorities in the county that I am proud to represent.
Why is Hertfordshire a high spender on education? It is not because we do not control our budget, but because, 20 years ago, we instituted a system of smaller secondary schools than most counties, with only five form entry, and with many local primary schools.
Hertfordshire is an area of high technology, where parents rightly have high expectations for their children. It provides 21 per cent. more pupils taking 0-levels and A-levels than average. I know that my right hon. Friends will wish to encourage that. They will agree that the principle of reinforcing success should be fostered. It is necessary, when planning this year, and in future years for proper levels of support for education and for proper levels for the education component of the grant-related expenditure assessment, to make enough allowance for the high level of education spending to which I have referred.
This is not to say that there are not things that we in Hertfordshire can do to improve our own position. I shall deal with county council services generally and the education sector in particular before making a particular request to my right hon. Friends concerning what they should do for us. I am glad to be able to say that as a result of close consultation involving senior county councillors and county officials there is a move afoot for the county council, possibly with the assistance of outside consultants, to scrutinise once again—the decision has not yet been taken by the county council but I am glad to see this initiative—its overall level of spending within its grant-related expenditure assessment of £303 million.
Many people believe that the long-standing policy of five-form entry secondary schools should be reviewed and that there must be a willingness to consolidate in line with existing rolls to provide the best possible value for our children and to achieve the spread of subjects and the excellence of teaching that is required. This is the view of many headmasters who have spoken to me privately about the matter. There is a wish to return to a policy of recruiting outside the county to achieve the excellence that I have described. There is need to examine again the number of primary and secondary schools in the county required to achieve the best possible effects.

Mr. Tristan Garel-Jones: Will my hon. and learned Friend agree that the teaching profession can assist Hertfordshire county council to retain the standards enjoyed by our children by working within its trade unions to try to achieve a reasonable wage settlement within the range of the Government's guidelines? If such a wage settlement were achieved, I think I am right in saying that it would probably not be necessary to make any cuts in the education budget.

Mr. Lyell: I am grateful to my hon. Friend. What he says is right. I am sure that this kind of support and cooperation will be obtained from the many teachers that we have met. My hon. Friend and I and, indeed, all my right hon. and hon. Friends within the county have met teachers, governors and parents who have expressed their desire to maintain the fabric of our high standard of


education. We can be confident, I believe, that when the teachers give advice to their unions negotiating the Burnham settlement they will bear in mind the part that they can play.
It is, I believe, sufficiently well known for me to say that Hertfordshire has allowed 6 per cent. for teachers' pay in its budgeting for this year. The Government guideline is 4 per cent. According to what has appeared on the tape today, the offer within the Burnham Committee—I do not know whether this represents an opening offer—is that 3.4 per cent. is appropriate. The background, as my right hon. and learned Friend the Member for Runcorn (Mr. Carlisle) the former Secretary of State for Education and Science has stated, is a rise in education salaries of 58 per cent. since 1979 and the Clegg report. If salary increases were kept down to 4 per cent., the county would be saved about £2.6 million. The proposal in Hertfordshire this year is for extra cuts of £4.1 million. If the number of teachers were reduced in line with falling rolls, which is not an unreasonable proposition, although it has not happened in all past years, and salary increases were kept to 4 per cent. it would not be necessary to make one other extra cut. That is very significant.
I am sure, from the very responsible attitude of every teacher I have met—and I think I can fairly say that 1 have met scores in the course of my discussions in the last few months—they will be putting that point very firmly when they are looking at what they can do to help. I am not saying that to suggest that teachers are overpaid. I greatly value what they do in our county. But then most other people would not regard themselves as overpaid either, and we know that levels of pay in much of the private sector are often rising between 4 and 6 per cent. and frequently less, as my right hon. Friend said, and not necessarily against the background of the increase of 58 per cent. since 1979, which I am happy to say teachers have enjoyed.
My concluding remarks concern what we look for from Government now and in the future, because my right hon. Friends have not only to look at this year, they have to look keenly at next year. This is where we would be very grateful for their sympathetic consideration. We are tackling our problems this year and some of the things I have said bear on that, but we are also looking to next year when rolls will go on falling and our problems will not simply disappear, though I hope we can square the circle and overcome them.
It is very important that we do not find ourselves boxed in by too tight a grant-related expenditure assessment. It is very important that that assessment, particularly in education, takes account of our high standards, and high standards of achievement, which we wish to maintain, and which parents all over Hertfordshire wish to maintain. When I say that in the last 10 days I have been to a very sensible and orderly meeting on this subject in Tring—which is, after all, a town of, say, 7, 000 to 10, 000 people in my constituency with one major secondary school—and the school hall was absolutely full, with standing room only, that will demonstrate more eloquently than the hundreds of letters that I and my colleagues have received how much we in Hertfordshire cherish our education system. We do not, therefore, wish to find ourselves boxed in on what we are entitled to spend. We have no wish to go into the penalty area but we must have sufficient room for manoeuvre to maintain those standards.
Last year we were very sensitive on clawback. We lost the equivalent, I think, of 3.3p in the pound in rates by clawback, a sum running to several million pounds. If we had that today, we should be that much better off at the start of this year. I was much encouraged by what my right hon. Friend said, that there is much less to fear from clawback this year, and I shall be inviting those who have the budgetary responsibility in the county to take that into account in manoeuvring right up to the top level of spending to which they are entitled. I see my right hon. Friend blenching a little, but that is how it has to be, because he knows as well as I do that the effect of clawback is not to give us a penny piece more that we are entitled to spend before we hit the penalty area, but simply to ease the cartilages a little, and enable precise budgeting to be done with even greater precision. That is one of the important technical details I have learnt over the last few months.
What we would say about clawback, if there were to be any, is that it is wrong in principle that those who stay within the guidelines should pay the penalties for those who do not. I appreciate that it is a long-standing system and perhaps one which my right hon. Friends have inherited. They inherited many a bad thing which they have sought to put right and I ask them to turn their formidable minds to putting this right as well.
Hertfordshire has been losing grant consistently, year in, year out, Government in, Government out. In 1973 we received 1.8 per cent. of the total grant going; this year we received exactly half that figure, 0.9 per cent. This year, in particular, the fact that we have very high rateable values in Hertfordshire, the fact that the individual has a highly rated house because it is on the outskirts of London and so digs deeper into his pocket to pay his rate bills than do others in other parts of the country, militates against the amount of grant that we receive; since it is assumed that because our rateable values are high we who live in those houses are rich. That is not necessarily a correct assumption. 1 am not taking any brickbats from the Opposition, and I am glad to hear that they are quiet when I mention that. [Laughter.] That is the way to stir them up, Mr. Speaker.
I am not taking any brickbats from the Opposition because more money has gone into inner cities, and more money has gone to the deeply deprived in our society, and this they no doubt welcome. I hope they will give credit for that to this Government, whom they always describe as being unconcerned with such problems.
Nevertheless, it is hitting us hard in Hertfordshire. We are not as rich as our rateable values would make us appear and we need a fairer system of grants for the future.
We are thoroughly behind what the Government are trying to achieve. We recognise the complexity of what they are seeking to do. Nevertheless, we cherish our education above all else and we will not have it said to us that we may not have a high standard of education. We believe it is possible to square the circle in the different ways I have suggested and we look to my right hon. Friends to do everything they can to help us do that.

Mr. John McWilliam: I have listened with great interest to what the hon. and learned Member for Hemel Hempstead (Mr. Lyell) and also the right hon. and learned Member for Runcorn (Mr. Carlisle) said in relation to education expenditure within the GREAs. I would


commend to their reading the report of the Select Committee on Education, Science and Arts on 14 to 16-year-olds, laid on the table and published today, because it advises the Secretary of State to introduce a system of curriculum-led staffing.
It is all very well for the right hon. and learned Member for Runcorn to talk about pupil-teacher ratios improving simply because of the accident of fewer children going into schools; and that is true only in certain age ranges, anyway. What he did not say was that that can create problems as well because, whilst there may well be an improving teacher-pupil ratio, if there are insufficient specialist teachers to provide the breadth of curriculum that a child needs, the improvement is illusory and the standard of education of the child accordingly poorer. Indeed, when we were taking evidence on this fact we heard from Dorset that it had attempted to introduce the recommendation that it should go to curriculum-led staffing but that it had been roughly 50 teachers short and had not been allowed to recruit them.
There is no doubt, therefore, that if the hon. and learned Member for Hemel Hemstead and his right hon. Friends want to see an improvement in education, they have to accept that it is marginally more expensive to introduce curriculum-led staffing than to look at misleading pupil-teacher ratios that do not tell us a great deal about either the schools or what the children are taught in them.
I would like also to complain bitterly about the overall level of education expenditure within this rate support grant order because in my county, Tyne and Wear, a very small metropolitan county with poor metropolitan district councils in it, the result of the penny-pinching in education last year and continuing pressure on it this year is that young people, in an area where youth unemployment is over 50 per cent. are unable to take appropriate courses of further education at certain colleges because those colleges happen to be in another local authority area. Unless it is a directly vocational course, or one leading on to a vocational course, those young people will not receive the outwith fee from the local authority.
Before the Government congratulate themselves too much, will they realise that within this set of dry documents there lies a tale of continuing human misery and tragedy in areas such as the North-East? Every halfpenny cut from local authority expenditure hits us in different ways in different parts of the country.
I listened with interest to the hon. and learned Member for Hemel Hempstead complaining that high rateable values in Hertfordshire were causing people problems with high rates. The high rateable value puts a far less onerous burden on ratepayers than the massive social and economic problems that we suffer in the North-East. The money that local authorities have to spend to try to counter at least some of those problems, because the House has given them a duty to counter them, results in high rates in Newcastle as well, not because of high rateable values but because the rate support grants particularly in the past year, going on to this year, are incapable at their present level of doing anything to alleviate the absolute disaster that the present Government have perpetrated on the North-East.
I advise the Secretary of State to think very carefully before he continues his claims that he has saved public money. Every time he cuts expenditure in such a way that

it costs us a local government job in the North-East not a halfpenny of public expenditure is saved, because the person concerned goes straight on to the dole. All that we do is to change the accounts from which the money comes. There is no opportunity for the person to obtain another job in my area. The adult male unemployment rate in some villages in my constituency is over 45 per cent. When we pay off a school caretaker because we close a school in a village such as Blackhall Mill we not only close the village's only amenity but produce another unemployed person three miles from the Consett steelworks. He does not have a cat's chance of another job. Therefore, let us be aware of when we are saving money and when we are not. Let us not be self-satisfied over the illusion of saving, which the Secretary of State seems to be so keen on.
There is another problem under the order. In an area where youth unemployment is particularly high the local authority, being a good employer, has traditionally always taken on more than its fair share of craft apprentices. Because of the restrictions on public expenditure imposed by the present heartless Government, it can no longer do so. Therefore, we are not only causing youth unemployment today but are storing up trouble. Industry in those areas is going out of existence so fast that it is not true, and it certainly is not taking on many apprentices.
In a few years we shall have acute shortages in necessary skills. Where will the carpenters, the electricians, the bricklayers and the stonemasons come from? Many of our schools are Victorian and are built of stone. We need all those skills to keep the fabric of local government and the education system alive. We are not training those workers and industry is not training them. Where shall we obtain them? The order does not contain sufficient provision even to permit little luxuries such as taking on an additional couple of apprentices.
I should like to refer back to the suggestion that somehow everything will be all right when the Government tell us what will replace the rates. I must again disillusion the House. Like the hon. Member for Isle of Wight (Mr. Ross), I serve on Standing Committee D considering the Local Government Finance (No. 2) Bill. It was clear from the debate on part I that no viable alternative—indeed, no alternative, whether viable or not—would be presented to the House in the coming year and probably not next year.
Any hon. Member who has taken the time to read carefully the Green Paper on the rates will know that the parts knocking down suggested alternatives are more tightly written and better argued than those setting up the suggestions. The overall impact of the Green Paper is to discourage any hope that there will be a real change. I do not believe that there will be any change. My impression is that the Green Paper was published merely to fulfil a pledge given by the Prime Minister some years ago. I have the distinct impression that that is as far as it will go.
I become very annoyed when I hear people decry local government and when I hear people glibly throwing around words such as "overspending", because, in the context in which it is currently used with regard to local government, "overspending" has nothing to do with the idea that the word would reasonably create. I see nothing wrong with a local authority, duly elected on a programme which it fairly put before the people and which it fairly stated would cost more money, carrying out that programme. That is democracy. What is wrong is central Government's trying to suggest to local government that


the civil servants in Marsham Street know best. They are all extremely able and intelligent people, who work very hard, but they do not know the problems in Winlaton and Blackhall Mill. My local authority certainly does. The civil servants do not know what the problems are in Blaydon and parts of Hertfordshire. Most of them have never been there. Come to think of it, I do not think that I have been to Hertfordshire.
It is ludicrous that local government is told "Be thrifty. We know best. We shall see you all right. We know the problems that you face" and at the same time there is imposed on duly elected local authorities the will of people who do not know where those authorities are, what they do or what the basic problems are. I cannot pay a high enough tribute to the many thousands of local councillors throughout the country, whatever their political persuasion, who spend hours and hours going through the tedious paperwork resulting directly from the Government's legislation. They spend hours and hours slogging their way through budget meetings trying to work out what they can do to save money on this and that and mitigate the worst effects of some of the orders.
I cannot praise those people enough, and I should like to hear the Secretary of State say the same for once. Local councillors receive next to no recompense. They work long hours, and their jobs and their families suffer as a result. I should like to hear the Secretary of State for once graciously tell them "You are doing a good job, lads. A few of you are a bit naughty, but you are all doing a grand job, and I hope that you will continue to do it." Without those willing people, we should not have an active local democracy. We ought to recognise that. Most of us are here all the time and we are paid for being here. We do not have to do anything but eat, sleep and think about politics, but they have their families to look after. So let us have some grace towards local authorities.
Derating and enterprise zones have been mentioned. Industrial derating as it exists in Scotland is an interesting concept. It is designed to try to stop Scottish industry paying more rates than it would, were it located in England. That is all. It does not effectively derate industry at all. The calculations are complex. It depends on fixed plant, investment and all sorts of things. I do not think it is a viable alternative.
It is nonsense to say that enterprise zones benefit. The biggest chunk of an enterprise zone in Britain is on Tyneside, in my constituency. All that has happened is that rental values have gone up by more than the occupiers would have had to pay in rates. The Secretary of State is saying to local authorities that they can forgo the rate income, and the landowner or whoever owns the factory is making a profit. It all seems strange.
This order is appalling. It brings no comfort to us in the North. It does nothing to alleviate the problems that people are facing as a direct result of the policies of the Government. It does nothing to help redress the balance of advantage that has always existed towards the South-East. It does nothing to encourage local authorities to be more entrepreneurial about attracting new industry. It does nothing to help ratepayers find money which, in the North, they are hard pressed to find.
None of us wants people to have to pay excessive rates. On the other hand, all of us want to see the kind of services that the House has legislated for properly financed and applied. I look forward to the day, which I think is coming

very soon because of this order, when a local authority takes the Secretary of State to court because it cannot carry out its fiduciary duty.

Sir Julian Ridsdale: I welcome the opportunity to speak in the debate. I have taken pan in many debates on rate support grants. When I first came into the House, rates were not nearly so much of a problem because local authority expenditure was not so high. More often than not the order went through on the nod with just one or two Members present. With inflation and increased spending, so much of which falls on the ratepayer, we all have constituency interests.
Both sides of the House must bear responsibility for what has happened. We have had the opportunity for many years to reform local government finance. One of the absurdities is that we have a rate support grant system so complex that even the Secretary of State, who is an able Minister, has to read very complicated jargon. I wondered whether he understood it himself when he was reading some of it.
Nevertheless, we have had an interesting debate so far. We had an important speech from my right hon. and learned Friend the Member for Runcorn (Mr. Carlisle), a former Secretary of State for Education and Science. I was pleased to hear him advocating the transfer of the huge burden of teachers' salaries from local government to the central Exchequer. The number of teachers in England and Wales is 443, 000. It is greater than the Armed Forces, but equivalent to the size of the Armed Forces after the end of the war. Just think of the reaction if the cost of the Armed Forces had been put on the rates and we had asked for a huge subsidy to help meet it. This is the system with teachers' salaries.
Conservative Members, who do not believe in subsidy, have to find an aggregate amount of rate support grant of £10, 175 million. I support the Chancellor, the Prime Minister and the Government in the aims of their financial policies, but I wonder whether a mistake has been made, as my right hon. and learned Friend the Member for Runcorn said, in making a deduction of 4 per cent. in the rate support grant. That means that the burden will be transferred from the taxpayer to the ratepayer or, as in my constituency, that there will be severe cuts in the social services. Among my 33, 000 constituents there are 10, 000) widows and many disabled people. They wish to live in their own homes. If we as a party care, as we do, we ought to be careful about the move we are making glibly to transfer this burden from the taxpayer to the ratepayer. It would be much fairer if this expenditure were borne by the taxpayer. Because of inflation, ratepayers are finding it more difficult to maintain their property and they are less able to bear the extra burden.
Essex faces cuts of £36 million to achieve the Government's target. When my right hon. Friend replies I hope he will give a detailed explanation of his reasoning and the arguments so that we can put them to our authorities. From the correspondence that I have had with my local authority, I am not satisfied with the position in which I find myself. This is why I am speaking in the debate.
To get down to the grant-related expenditure in Essex, while taking account of inflation, will require a £7 million cut. As I said, the additional cut is £36 million. That means either a further burden on the ratepayer or further cuts in


social services. I should prefer the burden to be borne by the taxpayer, not the ratepayer. In the end it will not achieve the result we want—value for money. It will bring about aggravation and agitation. It will undermine longterm Government policy, which is the policy that we should be pursuing.
Essex has been treated unfairly because it has done what it can in the past to try to meet the targets and has been good in achieving the required expenditure cuts. We do not like to compare ourselves with other counties, but when we look across the water we see that Kent is getting very much better treatment because of an anachronism in the rateable value. My right hon. Friend shakes his head. I am glad, because it gives me an additional argument to put to my local authority which tells me that Kent is receiving £60 million more than Essex in the settlement. I wish to have arguments that will satisfy not only my constituents but my county authority.
In a speech in 1972, I said that the 1972–73 approved expenditure on which grant was calculated was £4, 735 million, of which the aggregate of rate support grant was £2, 528 million. That has risen fivefold in 1982–83. We now have a figure of £21 billion and a subsidy of £10, 175 million. The subsidies are Alice in Wonderland figures. We do not believe in subsidy, but we believe that we should try to get value for money and responsibility from those who must carry out——

Mr. Dan Jones: I notice that the hon. Gentleman heavily weighed his words on subsidy. The Secretary of State did that as much as the hon. Gentleman. Is it not a fact that the housing stock is becoming older? Costs are bound to rise as a consequence. Surely it must be acknowledged that houses that were built before the turn of the century will now need many repairs or must be demolished and replaced by new houses. Surely the hon. Gentleman will realise that and take it into consideration for Essex.

Sir Julian Ridsdale: I shall take those matters into consideration, but I wish to see realistic local government finance. I hope that my right hon. Friend will answer some of the points that I have made about Essex. I was delighted to hear my right hon. and learned Friend the Member for Runcorn approve the proposed transfer of teachers' salaries to the central Exchequer. If that is done, much of the steam will be taken out of the reform of local government finance. We need not worry about poll tax and other matters. To answer the intervention by the hon. Member for Burnley (Mr. Jones), if those proposals are carried out, the person who looks after his own house will have more money to spend on it because his rate bill will not be so high.

Mr. John Cartwright: I hope that the hon. Member for Harwich (Sir J. Ridsdale) will forgive me if I do not follow all his arguments about the problems in Essex. However, on his main point, there is no doubt a strong case for transferring the financial responsibility for certain social services from local government to central Government. I hope that we do not grab at that straw without thinking about it carefully, because it could leave us in a position where local authorities are running services for which they are not financially responsible. It would

cause difficulties in the relationship between central and local government if the former were paying and the latter administering. I agree with the hon Member for Harwich that the rate base is not large enough or buoyant enough to meet the demands that are being made on it, which is why we must have a reform of local government finances.
Faced with the plethora of documents before us and the complexity of the formulae and calculations, my abiding feeling is one of sympathy for my former colleagues in local government and especially for local authority treasurers who must make some sense of the matter. The Government's most powerful supporters would not deny that there is an element of doubt and uncertainty about the impact of the grant system on the present position.
In the Green Paper entitled "Alternatives to Domestic Rates, " the Government said:
To budget sensibly and tightly, local authorities need to be able to project their income and their cash flow with reasonable precision.
All hon. Members will agree that local authorities have grave difficulties at the moment in forecasting their grant income. That is not a new problem. The rate support grant system has had, in recent years, a lottery element. There have been one or two winners and many losers. The winners and the losers seem to be decided by the attitudes of the Secretary of State of the day.
As long ago as 1976, the Layfield Committee, talking about the rate support grant system, said that the
amount has been far from constant and its volatile and unpredictable character has been marked.
That has also been a factor in the past few years. The material before us shows that the figures are later than usual and, more shrouded in mystery than usual and that the whole system is more complicated than any that we have had before. Our discussions today are dominated by the spectre of the Government's second attempt at a Local Government Finance Bill. I agree strongly with the point made by the Member for Manchester, Ardwick (Mr. Kaufman). I do not altogether agree with the comment in paragraph 9 of the main report that clause 4 of that Bill will clarify the position. "Clarify" is not a word that I would have used about clause 4 in any of its manifestations.
Three aspects of the procedure before us are the grant-related expenditure assessments, targets and holdback. The GREAs are the central mechanism of the grant system. They are the foundation on which the edifice rests and increasingly they are to be used for target-setting in local government spending, despite all Government assurances to the contrary during the passage of the Local Government, Planning and Land Act 1980. The GREAs are supposed to measure what each council must spend to provide a common standard of service. However, there is wide agreement that GREAs do not properly measure needs in different parts of Britain. I quote the Association of District Councils, which is still Conservative-controlled, which said that the grant-related expenditure system is "extremely suspect and unreliable". In January it said of GREAs:
They are much more complex, unintelligible and uncertain in their results than the previous system, and produce inexplicable and widely varying assessments unrelated to local spending needs of individual districts and types of district.
That is generally agreed in local government, as can be seen from some of the speeches that we have heard from hon. Members on both sides of the House.
Some of the anomalies have already been referred to in the debate. The police service is the classic example. We


know that the GREA for the Metropolitan Police has increased by 24 per cent. between the supplementary report of 1981–82 and the 1982–83 report. That compares with a total increase for England of only 8.9 per cent. and an increase for the police authorities outside London of only 3.6 per cent. That huge rise for the Metropolitan Police means that there must effectively be a cut for all other police authorities. As is clear from the GRE figures, the lowest rise is in the area most affected by street violence, Merseyside, where the increase is only 0.8 per cent.
Either the GRE figures for 1981–82 were wrong or those for 1982–83 are wrong. They cannot both be right if there is such a massive change. As a further sophisticated amendment was announced today by the Secretary of State, that means another alteration. That shows that the GRE fixing at the Department of the Environment is not an exact science. Yet much depends upon those figures.
The second issue is housing. The Secretary of State reminded us of the Government's alteration this year, which proposes that if a local authority's notional housing revenue account is in surplus, its GREA is assumed to be zero. It is assumed that there will be no profit made from council rents transferred to the general rate fund. But that means that if there is to be a zero GRE figure for housing for a local authority it has no incentive to raise rents because it is automatically protected from a loss of block grant.
On the other hand, the urban areas, which often still receive housing subsidies and make contributions to the housing revenue account from their general rate fund will, if they fail to raise rents by the Government's recommended £2.50, have to increase their spending to make good the deficit out of the rate fund. That will lay them open to a loss of block grant and all the other penalties that will follow from the loss of block grant. The net result of this approach is to drive up rents in the areas with the greatest housing need and the worst housing problems, and where the service being given to tenants is often declining as the rents are rising. This is typical of the many anomalies of the GRE system.
Although targets are not set out in the report they are clearly central to the Government's strategy on the allocation of grant and in the control of local authority spending. Paragraph 8 of the main report puts it mildly. It says:
The Secretary of State is therefore issuing guidance to each local authority about a target level of expenditure.
That sounds innocent and reasonable. However, there is a sting in the tail of paragraph 9, which says:
the Secretary of State considers that it would be desirable to operate a scheme whereby the grant entitlement…should be abated for any authority spending above both its target and grant-related expenditure.
We know that under clause 4 of the Local Government Finance (No. 2) Bill the Government are seeking to introduce a powerful weapon to ensure that those targets are adhered to.
I object to the basic principle of setting targets for individual local authorities in this way. These targets are based on arbitrary decisions, not on any real, effective judgment of local needs and circumstances. They are based on the concept of a standard level of service which if applied would produce the dull uniformity that is inherent in the idea of a standard level of services. Variety, pioneering and experiment have always been the life blood of local government. We shall stamp out that feeling if we

go too far down this road of overall standard levels of services, and if the target level of spending is applied for all local authorities.
I reject the principle of targets as the Government are applying them because I believe that it is an intrusion into the autonomy and freedom of local authorities. It is based on the centralist philosophy that the man in Whitehall or the man in Marsham Street knows best. I believe that the decisions about spending levels and the quality of local services ought to be taken by local people, and not by central Government or civil servants. I certainly believe that Government should not be involved in all the detailed spending of individual local authorities.

The Minister for Local Government and Environmental Services (Mr. Tom King): I have listened to the speech of the hon. Member for Woolwich, East (Mr. Cartwright) with interest, and I think that the House would be interested to know whether he is the spokesman for the SDP on these matters. He often, says "I believe" and the House would be interested to know whether that includes "we believe". He has spoken of decentralisation, a view with which many hon. Members on both sides of the House will be sympathetic. However, does the hon. Gentleman believe that national Government should have an overall responsibility for the level of public expenditure as represented by local government expenditure? That was the policy followed by some of his senior colleagues when they were in Government in another party. Does the policy of decentralisation mean that that policy has now changed?

Mr. Cartwright: I am the spokesman for the SDP in this House and I carry my colleagues with me in what I say. A little later I shall be spelling out some of the thoughts that the SDP has on its approach to the reform of local government finance. On this issue we are in the happy position of being no worse off than either of the two old parties. Neither of them is clear about its attitude to local government finance. The Government have simply produced a Green Paper that reproduces most of the schemes looked at by Layfield. The Labour Party has riot yet announced its own views about reform of local government finance. Therefore, although the SDP policies may not be clear it is in no worse a position than the other two parties.
Yes, central Government has a proper duty to be concerned about the overall level of public expenditure. Therefore, it is right for the Government to have a view about the overall level of grant and there is a case, although it could be argued both ways, for central Government to have a view about the totality of local Government spending. Where I quarrel with the Government is when central Government become involved in the individual spending decisions of hundreds of individual local authorities. That is wrong and I have not yet seen the Government spell out a clear economic case that justifies that sort of detailed control.

Mr. King: The hon. Gentleman referred to grant. Central Government have to be concerned about the level of grant—that is what the order is about, and it is Government money that is going. I hope that the SDP will realise that the Government have to be concerned about. that. The question is whether they should be concerned about the overall level. The hon. Member thought that there were other arguments, although by and large it was


probably right for central Government to be concerned about the overall level of local Government expenditure. If that is so, and if those levels are not being achieved, what does the SDP think is the right approach to helping that achievement?

Mr. Cartwright: Our approach is clear from the policy of decentralisation. If, as a result of the reform of local government finance, and probably from reforms of local election procedures, local authorities can be much more directly accountable to electors for spending, instead of large amounts of local authority spending not being perceptible to the ratepayers, because they come from central Government grants or from the domestic rate, we shall have a closer relationship between a local authority, its spending and its local electors. The best way of controlling local authority spending is by local people, not by central Government deciding what the right level of an individual authority's spending should be or what services are right and proper for individual local authorities.
Some of the anomalies in the grant system have already been referred to. For example, the Secretary of State said that no local authority would be asked for more than a 7 per cent. cut in real terms, but that is against the minimum volume budget and is the lower of the original or the revised 1981–82 Budget. That means that those who increase budgets from the original budget of 1981–82 to the revised budget will have to suffer a much larger cut. It also means that some of those who cut their budgets between the original and revised budgets may still find themselves penalised by anything up to that 7 per cent. figure.
We also know that that 7 per cent. is based on the Government's assumption of a 4 per cent. pay increase and a 9 per cent. increase in other prices. There is wide cynicism in all parts of the House as to whether those figures will be achieved. If they are not, and the figures are higher, there will be a further real cut beyond the 7 per cent. figure.
Thirdly, there will be no adjustment in these targets for unforseen circumstances, such as riots, snow damage, local authorities meeting higher costs as a result of an increase in interest rates, or higher rent or rate rebate commitments as a result of the high unemployment. If any unexpected extra expenditure occurs there will be no alteration in the targeting system and local authorities will have to make good by making cuts in other services.
I wish to make a point about the Government application of the targeting system of individual local authorities. Some local authorities, who have met their 1981–82 target figures, are nevertheless clobbered the second time around under the Government's proposals for 1982–83. This is because of the inadequacy of the original GRE figure, which turns authorities into overspenders and wipes out the credit for past performance. That is particularly true of inner London.
I take the examples of four inner London boroughs, of varying political persuasions, so that I am not accused of any political bias. I shall start with Islington, which, as you will understand Mr. Deputy Speaker, is close to my heart. On the 1981–82 figures, Islington was estimated to be 2.9 per cent. below its target figures. It is under its target spending figure, yet it is required to make the full 7 per cent. cut to achieve its target for 1982–83.
Hammersmith and Fulham, a Liberal-Conservative coalition council, is 2.6 per cent. under target, yet it is expected to make the full 7 per cent. cut. Southwark, a Labour-controlled authority that crept in, was 0.1 per cent. below target, but will have to make the full 7 per cent. cut to achieve its target for 1982–83. Wandsworth, often held up as a model of economy—the sort of authority that makes the cuts that the Government require—achieved a performance of 11.5 per cent. below target, yet it is expected to make further cuts of 3.2 per cent. to achieve its target for 1982–83. That shows the peculiarities and injustices of the target system.
I wish to point out two anomalies in the holdback system. I am grateful to the Association of Metropolitan Authorities, which produced a clear guide on the rate support grant settlement, for drawing attention to them. The first anomaly is the built-in propensity to overspend. As the Secretary of State said, the penalties apply only when spending is above the GRE figure or the target figure. Both add up to the same total. If councils spend to the higher of the two figures, to extract the last penny of grant, the total will be overspent. The AMA assesses the 1982–83 potential overspend as £790 million–58 per cent. will be in the shire counties and 23 per cent. in the shire districts. That is a major anomaly.
The second anomaly is what the AMA refers to as the switchback effect, which affects a number of authorities with a low rateable value per head of population—less than £133. Those authorities have discovered that if they continue to spend through the penalty area where they lose grant, they begin to attract grant again. In some cases, they can theoretically attract all the grant lost in the penalty area if they continue to spend. That is an incentive to spend rather than to cut expenditure. I am hesitant to draw attention to those anomalies as the Government will seek to make their arrangements even more complicated next year to tackle them. I should be grateful if the Minister would deal with those points when he replies.
The orders before us and the Local Government Finance (No. 2) Bill are part of a continuing process of ever-increasing central Government control—a process that rests on the theory that the man in Marsham Street knows best. It is a process of ever-increasing complexity. The Layfield Committee in 1976 said:
the method of settling and distributing the grant is little understood outside very specialised circles.
If that was true in 1976, it is even more true today with all the talk in the debate about iterative processes, skewed targets, minimum volume budgets and close ending. It is dangerous that something as important as the rate support grant is so little understood by those whom it directly affects.
The whole process confirms one of the major conclusions of the Layfield Committee that local authority dependence on central Government grant has been a main factor undermining the independence and autonomy of local government. Layfield said:
We are satisfied that the amount of grant…powerfully reinforces the political pressures for Government intervention.
His committee said:
We too believe that in the end he who pays the piper calls the tune.
The whole centralist approach of the Government, which follows the pattern of the Labour Government, threatens the autonomy of local government. It is a commitment to an ever-increasing, more complicated and incomprehensible jungle of regulations. It will produce inevitable


injustice and unfairness between local authorities. That is why I and my colleagues believe that the reform of local government finance must reduce the dependence of local authorities on central Government grant. We must create a position in which grant is used simply as a means to equalise varying levels of resources available to local authorities. We must have a system of local government finance that makes local authorities more responsible for paying for their own services. That system must give control of spending to local electors, not central Government. The orders before us go wholly in the opposite direction, and my hon. Friends and I will oppose them in the Lobby.

Mr. K. Harvey Proctor: I propose to vote against the rate support grant orders. My reasons for doing so are not the same as those advanced by the hon. Member for Woolwich, East (Mr. Cartwright), still less those advanced by the right hon. Member for Manchester, Ardwick (Mr. Kaufman) in his opening remarks. In contrast to the right hon. Member for Ardwick, I fully support the Government's aim of curbing local and central Government expenditure. A reduction in Exchequer support for local authority relevant expenditure from 59.1 per cent. to 56 per cent. is to be welcomed within the present system. Even so, aggregate Exchequer grant in England in 1982–83 will be a staggering £11, 400 million.
My opposition to the orders is based on the distribution of expenditure between shire counties and inner city and urban areas. Before I develop that theme, I wish to thank my right hon. Friend for his timely reply today to a letter that I wrote on 22 December last year—together with the hon. Member for Harlow (Mr. Newens) and some of my hon. Friends—about the position of the London new town counties and the block grant system. I received his reply only today, and it needs careful consideration. I am sure that hon. Members will wish to examine it closely and discuss it with their new town councils before we reply to the Minister. In his letter he said:
As the paper points out, the actual spending of nearly all the district councils with new towns in their areas is above GRE in 1981–82. The question which we have to address is whether this is because the GRE's understate the spending needs of these authorities, or because they are providing higher than average levels of services—if this is the case, the principles of the grant system mean that their ratepayers should be expected to make a higher contribution than in other areas, and grant is assessed on that basis.
My initial reaction to that statement is that local authorities with new towns have responsibilities placed upon them not of their own volition, but at the request of the Government and development corporations. I wish to discuss that important letter with my district council before I reply to the Minister.
Hitherto, it has been the Government's policy to redress the imbalance of the previous Labour Administration and return funds and resources to the shire counties. The rate support grant settlement orders mark the end of that process and initiate a trend of redistribution back to the urban areas. My right hon. Friend the Secretary of State for the Environment, in a purple passage in his speech, made it clear that much was being done for the urban and inner city areas. 1.understand that within the settlement there will be an estimated increase from 18.3 per cent. to 18.6 per cent. in block grant to the urban authorities within the inner city and partnership schemes, assuming that authorities spend to target.
I shall briefly describe the effects on Essex. I am sure that the Secretary of State will agree that Essex has consistently been one of the most prudent and efficient local authorities in the country and that its record of expenditure in any service amply demonstrates that. However, the Essex case is that the Secretary of State confirms that the county needs to spend £28 million more just to maintain its present level of service, grant-related expenditure figures. Nevertheless, the county is to receive £7 million less in grant to support that.
The Government are further saying that Essex should really be spending £36 million less to get down to the Government's target figures. Even to get down to the grant-related expenditure figure, while accomodating inflation, has required £7 million of cuts, as my hon. Friend the Member for Harwich (Sir J. Ridsdale) said. To contemplate a further £36 million reduction would require savage reductions in service in all areas, in defiance of statutory duties.
The result is that in 1982–83, Essex is losing £18.8 million of grants, compared with last year. Of that amount, £11.3 million is clue to the national percentage cut, to which I referred earlier, from 59.1 per cent. to 56 per cent. That is a national decision that I and the county council accept. However, the county council objects—.and I agree with it—that its share of grant-related expenditure has fallen from 2.244 per cent. last year to 2.208 per cent. this year. As a result, Essex has lost a further £7.5 million, which the Essex ratepayer has to meet.
I am delighted to see my hon. Friends the Members for Brentwood and Ongar (Mr. McCrindle) and Saffron Walden (Mr. Haselhurst) present for this debate. It shows the importance that we attach to this matter. So far I have probably carried my hon. Friends with me in what I have said, but I may not do so for much longer.

Mr. King: One of the arguments advanced by Essex concerns numbers and the problem whether GREs accurately reflect the up-to-date numbers. The argument is that there are more ratepayers in Essex than there were in earlier years. That should not be overlooked. My hon. Friend will know that we had meetings with the senior members and officials of Essex, and I put the question to them, as I do now to my hon. Friend: what has happened to the product of the 1p rate in Essex during the past three years?

Mr. Proctor: I need notice of that question. I have said that I welcome the statement of my right hon. Friend the Secretary of State about the census figures coming through into the grant-related expenditure estimates in future. That will help a rapidly growing county such as Essex, and also a rapidly growing new town such as Basildon. It will help in future, but it is little consolation for the next financial year.
I come back to my argument. I ask myself why this has happened. I can only assume that it is because of the Government's decision to redirect at least some resources back into urban areas. Why? In my view, it is because of Government panic reaction to the riots that plagued our inner city areas last year. The idea is to throw money at the problem and hope that it will go away. To add insult to injury, we are now throwing at the problem not only money, but Ministers.
That brings me to one of my principal reasons for voting against the order, and that is the unwise appointment, in my opinion, of a Minister


to take special responsibility for matters concerned with race relations in the Department of the Environment's field of activity."—[Official Report, 11 February 1982; Vol. 17, c. 465.)
I make no personal criticism of my hon. Friend the Member for Ealing, Acton (Sir G. Young), who has taken on these responsibilities. However, I think that he was most unwise and ill-advised to issue an invitation to the ethnic community leaders, as reported in the Daily Mail, saying:
If you have any serious problems just write to me and I will be glad to see you. The important thing is that people should feel they have a Minister they can come and talk to. My door will be open.
The extent to which a Minister's door is open should never depend on the colour of a person's skin.

Mr. Deputy Speaker (Mr. Bryant Godman Irvine): Order. Perhaps the hon. Gentleman could help the House by saying which part of the instrument he is talking about.

Mr. Proctor: I am dealing with expenditure in the inner city and urban areas, as a number of other right hon. and hon. Members have done. I was commenting on the Minister who, presumably, will oversee the expenditure of these funds. My hon. Friend's reported comments that much of the £270 million mentioned by my right hon. Friend the Secretary of State in his opening remarks that is allocated to the urban programme next year—£60 million more than this year—should go on projects which will help to provide work for young unemployed blacks as well as improving their physical environment through better housing, will be heard with frustration and anger by the unemployed in Basildon and the county of Essex.
In my opinion, that appointment is an exquisite example of positive discrimination. It is an insult to the vast majority of the ethnic community and the indigenuous population who did not riot, burn and loot last year to the tune of £28 million, and who believe that this settlement represents funds which have been diverted from shire counties, such as Essex, and new towns, such as Basildon, to inner city areas. It will be seen—rightly, in my view—as a political sop, a gimmick, that will be regarded as being nothing more than an affront to the dignity of the ethnic communities and one which will do untold damage to race relations in this country.
I shall use my vote tonight in protest against an unworthy act which will be bitterly resented and regretted by the British people. It will make more certain, not avert, racial strife in the months and years ahead.

Mr. Frank Haynes: I have listened carefully to what has been said in the debate, and it appears to me that there is a lot of complacency among Conservative Members apart from the hon. Member for Basildon (Mr. Proctor), some of whose comments I welcome.
I am sorry that the hon. Member for Harwich (Sir J. Ridsdale) has left the Chamber. He said that he did not agree with subsidies. It is odd to hear a statement of that kind when one realises that there is a fair amount of agriculture in Harwich. Agriculture obviously involves subsidies. If the hon. Member wants the subsidies to be stopped, he should say so.

Mr. Michael Brown: Is not the hon. Gentleman on a slightly dangerous point when he refers to subsidies? I presume that he is trying to make the point that farmers in Harwich are subsidised. However, I always thought that agricultural subsidies were meant to benefit consumers rather than farmers.

Mr. Haynes: I am a little surprised that the hon. Member should make a point like that. He represents a steel constituency. He went into the Lobby to stop subsidies to the steel industry in his constituency. He ought to be ashamed of himself for making a comment like that.
The Secretary of State for Defence asked the House for more subsidies to buy Trident, because it is much more expensive nowadays. He will be asking again. Conservative Members complain about subsidies, yet go into the Lobby to approve subsidies for that type of expenditure. Therefore, it is a bit hypocritical to hear such comments from Conservative Members.
The right hon. and learned Member for Runcorn (Mr. Carlisle)—who has left the Chamber—said that the rate support grant was complicated. That is not the point. The rate support grant should help local authorities to provide services for the people. Cuts in the rate support grant mean cuts in services. I have a whole list of them here, particularly for the county that I serve. What does a reduction mean? I have heard more about education this afternoon than anything else, as though it is only education that matters. I am a little surprised at that. The hon. Member for Ealing, North (Mr. Greenway) knows as well as I do that the Government have imposed massive cuts on local authorities that provide adult education. In some places, adult education has almost disappeared. People, particularly in my constituency, are trying to encourage those who have accepted redundancies from heavy industry to keep themselves active by means of adult education.

Mr. Harry Greenway: I should like the hon. Gentleman to make it clear that he does not deplore education debates and that they are most valuable. To that end the hon. Gentleman and I have sought to have education debates in the House. His remarks are a little out of phase with what he ought to be saying.

Mr. Haynes: I accept part of the hon. Gentleman's point. However, he must agree that many places have almost lost their adult education set-ups. My county was seriously affected. That was one reason why the adult education group was set up in the House. We go all over the place to find out the problems and to see if we can help.
The winter is not quite finished yet. I listened to the Prime Minister today talking about the way in which the economy has been affected by the snow and bad weather. The roads were tremendously affected by the bad weather. At times, we could ill afford even to grit them because of the Department of the Environment's cuts. The Minister should listen to what is being said, because I am severely criticising the Government and their monetary policy. The rate support grant is related to that. The Government's policy has been a dismal failure and the number of those who cannot find work speaks for itself.
The rate support grant is linked to the Government's policy on monetarism. Many local authorities will have to cut back even further than at present. My right hon. Friend the Member for Manchester, Wythenshawe (Mr. Morris), who once had responsibility for the disabled, asked a


question today about 1981 being the International Year of Disabled People. Cuts were made up and down the country, although we were supposed to have provided that little bit extra. The disabled should be considered not only in 1981 but in every year and we should provide the proper services.
The social services could not exist without a Government grant. They get a slice of the rate support grant in order to provide the necessary services. One day an elderly lady met me at my surgery. She was 68 and had a mother at home aged 96. Her mother was not in an old people's home or in a warden's complex but was living with her daughter in a bungalow. The county of Nottingham has recently had four years of Conservative rule and cuts were being made before the Conservative Party formed the Government. The lady received home help twice a week. The Conservatives were elected to county hall, and at the end of the first year she received help only once a week. After the second year, she did not receive any help. However, there has been a change in political flavour at county hall and those services have been restored. That elderly lady was not looking after her mother at the State's expense, although that would have been possible. She is eaten up with arthritis and finds it difficult to cope.
That is what cuts mean to the social services. The same applies to the disabled. Ministers come to the Dispatch Box and ask for voluntary services, but life does not work like that. Sometimes we must beg people to do something, people have plenty to do anyway. We try to encourage families to look after their old people and they usually do. However, we have tremendous responsibility for some people and we should look after them. They are being hit by the cuts in the rate support grant.
We are told that inflation is the No. 1 priority. If inflation rises, as it has under this Administration, and if the rate support grant decreases, how are we to pay for the services that must be provided? That can be done only by increasing rates. Nevertheless, the Secretary of State has the nerve to stand at the Dispatch Box and to say that local authorities should not increase their rates. That is what he is saying in so many words. If local authorities go a little beyond the guidelines that he has suggested, he clobbers them and threatens to apply cuts in some other way.

Mr. D. N. Campbell-Savours: He taxes them.

Mr. Haynes: Taxes will not work for this Government. At present we have a means test in the form of rateable value. If we switch to tax, those with money will have to pay. That will not help the Conservative Party, because its members will stop contributing to party funds. The Government will get a belt in the mouth for that.
We must be sensible. I cannot see any alternative to the present system. It is obvious that there is no other alternative, or the Government would have adopted it by now. The Government made many promises before the election. I remember when the Minister of State and the Secretary of State were in Opposition. They talked differently then from the way they talk now. They said that when the Conservative Party returned to office there would be less Government control over local authorities. The exact opposite has happened. The Conservative Party is now in power, and the Government are shackling local authorities. They are also shackling the trade unions—or they think they are.
Whatever the Government attempt, it goes wrong. That is clear if one looks at the economy since 1979. People outside have recognised that. People recognise it in my constituency because I tell them why the rates are going up. It is because of this Administration. I shall continue to tell my constituents the truth. The Government are causing the rate increases, not the councillors back home, who are being made to increase them.

Mr. Harry Greenway: I cannot go down the same road as the hon. Member for Ashfield (Mr. Haynes), who has given us a wide-ranging speech with masterly content. I know what an excellent fellow he is. However, if I went through education in general, adult education, the problems of the disabled, social services, inflation, taxation, reform of the unions—to name but a few subjects mentioned by the hon. Gentleman—I would be supporting him in his misdirected straying from the business before the House. Therefore, I return to the subject.
I welcome the grant-related expenditure assessment as a more flexible and selective system, on the whole, than the old method of calculating the rate support grant. I cannot see how anyone can argue for a blind block grant that is not open to scrutiny in detail as against the much more open system, which has a much greater moral force on the areas to which it relates—[Interruption.] I am no longer following the argument of the hon. Member for Ashfield. I had to explain that I could not go down the same road. The system that we have had for the past two years is much more open and much fairer, and is to be welcomed for that.
For the hon. Member for Woolwich, East (Mr. Cartwright) to say that the figures for this year are more shrouded in mystery than usual is nonsense. With the exception of last year the figures are more open this year than they have ever been. The hon. Gentleman went on to say that, if implemented, the target levels would produce a dull uniformity of provision and that it was a case of Whitehall knowing best. What the hon. Gentleman says does not stand up to examination. One has only to examine the GREA in detail to see that it takes account of local needs specifically and visibly. There is no question of uniformity. There are things that one can say against the GREA, but not that.

Mr. Campbell-Savours: The hon. Gentleman implies that the GRE is translucent and that he can see it in detail. Has he seen the formula on which it is based?

Mr. Greenway: Yes, Sir. It is open to everyone to see the formula. I am pleased that the Under-Secretary of State for the Environment, my hon. Friend the Member for Ealing, Acton (Sir G. Young) is in the Chamber bsssecause he will be concerned with what I shall say.

Mr. King: Did not my hon. Friend think that that was an extrordinary intervention by the hon. Member for Workington (Mr. Campbell-Savours)? As my hon. Friend is a conscientious Member of Parliament, he will have studied the GRE formula, which we published last year and which we made available to every hon. Member. We shall do the same this year. Each local authority has its own printout of its calculations and it is possible for hon. Members to see the way in which the formula is put together. It is obvious from the question by the hon.


Member for Workington that this is the first time that he has heard of the formula being available for examination. We published it and every responsible Member should have read it.

Mr. Greenway: I am grateful to my hon. Friend because it puts the hon. Member for Workington (Mr. Campbell-Savours)——

Mr. Campbell-Savours: rose——

Mr. Greenway: I shall not give way to the hon. Gentleman because I made my point clearly. It was based on a detailed study last year and this year of the figures to which he referred. It was unworthy of him to make that intervention.
I welcome the system and this year's settlement because the needs of London are recognised. A real term improvement in cash grant has been made for 1982–83 compared to 1981–82. I am particularly in favour of this year's GREA because the special needs of boroughs such as Ealing can be met by the increased weighting given to the proportion of the population that is non-white or non-United Kingdom born. I know that my hon. Friend the Member for Ealing, Acton will be concerned about that.
Ealing's GREA for 1982–83 more closely represents the needs of an authority that in some ways are more akin to those of an inner London borough than an outer London borough. It is commendable that the system is so flexible as to admit recognition of that important point. I am thinking of the needs in some parts of Ealing for extra teachers of English as a second language. It all costs money. The rate support grant allows for that. We are grateful. There are other relevant social and housing needs, which are covered in the settlement. We are grateful for that.
I congratulate Ealing council on meeting expenditure targets worked out with the Government for 1981–82 because that will be to the benefit of the borough and its ratepayers. The target set for 1982–83 leaves it only a 1 per cent. reduction in real terms to find—enough in itself, but small compared to that of almost everyone else.
Hon. Members will not be surprised to hear that Ealing is a Conservative-controlled council. Its efficiency has been achieved by well-run local government and other factors such as the selling of council houses and by crediting the housing revenue account with interest on receipts from those sales, which are expected to reach 2, 000 by the end of March.

Mr. Geoffrey Robinson: What receipts? There will be none.

Mr. Greenway: That can be worked out. I shall find out for the hon. Gentleman. That will be shown in the council's accounts.
Additionally, capital receipts from the disposal of surplus land for which there is no use, bought by previous Labour Administrations, have also been credited to the housing revenue account. Much of that surplus land was released quickly, when Ealing council was taken over by a Conservative Administration, to the private sector so that starter homes for private ownership could be built. That meant £10 million for the housing revenue account, employment for local people and more money in the form of rateable value for the rest of the local community.
Last December, I had the pleasure of opening one of a number of houses. Land had been released just over a year previously, work started shortly after that, and within a year the houses were completed and people were living in them. That has been a great gain in local housing. All types of house have been built—low-priced, single-bedroom and larger units.
The borough's direct labour operations have also been streamlined and that has helped to balance the books. Direct labour is an area, if ever there was one, in which many authorities have been wasteful, overmanned and inefficient. Much remains to be done in areas other than Ealing, and even Ealing is not yet satisfied. Nevertheless, it has tightened up its direct labour operations substantially, to the great benefit of the community.
This has been a great success story, not one of pain and anguish as many would have us believe, and it is based on a fair system of GREAs, which penalises those authorities which have no care for tomorrow and are spendthrift with people's hard-earned rate payments. If Ealing had overspent by £1 million, the rates would have been increased by 4p in the pound. Ealing borough council has done its ratepayers a great favour by not doing that. Moreover, as a result of its efficiency, if there is any increase at all in the coming year's figures it will be small—contrasting sharply in the minds of people in Ealing and elsewhere with the 60 per cent. increase that took place in the penultimate year of the local Labour Party's last period of office.
The only threat to the smooth running of local authorities is the built-in pay increase of 4 per cent. allowed for in the GREAs. If the teachers, for example, settle for more than 4 per cent., the result will be either fewer teachers or an increase in rates. I am not arguing against the setting of pay targets. As has already been said, teachers' pay has increased by 58 per cent. since 1979. A 4 per cent. increase would be more than reasonable for them, and the same is true of other local government employees. They have benefited substantially in wage terms since 1979 and a wage target is reasonable for this and other years.
We should seriously consider hiving off this part of local authority expenditure and making teachers' salaries centrally funded. That would relieve local education authorities of an enormous financial responsibility that could seriously disrupt local finances if a large claim were awarded to teachers.
I wish to comment briefly on the way in which the GREA has affected advanced further education in Ealing. We have one of the best colleges in the country—the Ealing college of further and higher education—but I must draw my right hon. Friend's attention to a problem that has arisen. Unlike other areas of the rate support grant, the advanced further education pool does not penalise authorities which overspend. The Ealing college receives 80 per cent. of its funding from that pool. Because the pool is overdrawn nationally, Ealing has been asked to cut the college's funds by £500, 000 in the remaining two months of the current financial year. It is clear that authorities which refused to reduce their budgets have benefited at the expense of those such as Ealing which have done so. That is grossly unfair.
As an authority which pursues a definite policy of financial discipline for its colleges, Ealing must not be expected to pay for overspending or lack of budgetary discipline by other authorities. I say that straight and true


to my right hon. Friend and ask him to consider it. Nor should Ealing be expected to pay because student numbers for 1982–83 are incorrectly calculated on out-of-date and partial statistics. For the grant system to work equitably, it must be adjusted to the actual number of students. At present, Ealing is understated by some £900, 000.
I have been strong in my comments as I wish to draw my right hon. Friend's attention to this. For those authorities exercising financial discipline and efficiency, the GREAs are certainly working, but in advanced further education, unfair irregularities must be ironed out urgently.
As a London Member, it would be wrong of me to participate in the debate without saying something about the profligacy of the GLC. [HoN. MEMBERS: "Come off it."' It is my duty and my business to defend the people of London, and particularly those of Ealing, North, who are being bled of hard-earned cash through the profligacy of the bunch of cowboys in control at county hall. My area is being subjected to a GLC rate increase of 90 per cent. The hon. Member for Ashfield, who has conveniently left the Chamber, talked about inflation and percentages. Let him take that on board.

Mr Newens: rose——

Mr. Greenway: No, I shall not give way for a moment. A supplementary rate demand of £50, 000 for one building, which has since been quashed, helped to break the back of the Hoover factory in Perivale in my constituency. As we know, that factory is now closing and employees being made redundant. Therefore, when I hear people saying that rates have no bearing on jobs, I bridle strongly.

Mr. Newens: The hon. Gentleman should make that point to the Government.

Mr. Greenway: A small shop next door to the Hoover building received a supplementary rate demand, happily also quashed, of £1, 200. That, too, cost somebody's job. There is further proof of what I say.
The GLC has had to levy that higher rate because among other things it has established at least 50 jobs costing about £25, 000 each, many of them totally unnecessary and non-statutory. In addition, each of those 50 people probably has a personal assistant, a secretary, a telephone, office space, all the paper that is pushed around, a typewriter and so on—[Interruption.] That is not cheap. It costs a lot of money, and people who cannot afford to do so, such as the disabled and many others who find it hard to make ends meet, are being milked to pay for it. Hon. Members cannot say that it is cheap to play the county hall game and throw other people's money around in that way.
I cite another example. The Londoner, the paper that is pushed through everybody's door four times a year, costs around £500, 000 per year. Moreover, it contains nothing but Socialist propaganda, much of it of a low and unattractive kind.

Mr. Newens: The hon. Gentleman wants it to be more attractive?

Mr. Greenway: It could not be attractive. Following the first edition, I received letters from business men and from ordinary people protesting strongly and vigorously against it. I sent them on to county hall but one does not often get answers to letters to Mr. Livingstone.
The GLC is establishing a job creation board costing £80 million. It has been said that every time there is an increase in a firm's rates of £5, 000, a job is lost. If one takes that as a rough figure and divides it into £80 million, the result is 16, 000. Therefore, the board needs to create 16, 000 new jobs to maintain the present position. What would happen if there were job creation at the rate established by the Labour Government of the late 1960s? Jobs were then costing £78, 000 a time, so today that £80 million would produce about 1, 000 jobs. Therefore, we are dealing with seriously diminishing returns.
Money is being granted to "weirdo" arts and many peculiar activities, such as the formation of a police committee costing £250, 000. The GLC has no remit to interest itself in the police. It has set aside over £1 million for the race relations committee. Heaven knows what that committee will do. The GLC has no remit on race relations. Therefore, one can understand why London people are so resentful about the way in which their rates are levied by the GLC.
If I had to end with an example of the sort of encouragement that business does not need to set up and produce real work, I should take the Brent local authority which is adjacent to Ealing. Houses stand side by side on the border of Brent and Ealing. A three-bedroomed house in Brent costs a ratepayer £600 a year while the house next door in Ealing, costs a ratepayer £300 a year. The difference speaks for itself. There are no better services in Brent and it is not such a nice place in which to live.
Finally, I hope that the Secretary of State will consider forcing the GLC directly to precept its rates so that it must go straight to the people on whom it makes these extravagant demands. It would get a direct crack back from them, which it deserves and needs.

Mr. Stanley Newens: The hon. Member for Ealing, North (Mr. Greenway), at the end of his speech, indulged in a trivial and petty argument which was unworthy of him and the respect in which he is generally held in the House as a result of his contributions on education.
The hon. Gentleman earlier argued adequate financial support for his constituency, which he regards as having the problems of an inner city area, in contrast to his hon. Friend the Member for Basildon (Mr. Proctor), who attacked the distribution of the total rate support grant as giving additional funds to inner city areas. I am utterly opposed to the attempts to set inner city areas against shire counties as rivals. Both shire counties and inner city areas have needs and we should he setting out to meet both. I oppose the policy of ruthless cuts in public expenditure
A principal reason for the increase in rates this yew is the rate support settlement and the Government's cutbacks. It is all very well for the hon. Member for Ealing, North not to face that aspect and to talk about the GLC. His attacks should be directed at the settlement proposed by the Secretary of State.
The objective pursued by the Secretary of State since he accepted office has been the reduction of public expenditure. Although he was frustrated, with the help of some of his hon. Friends, on some of his methods, he has relentlessly continued towards the same goal. It is not difficult to win public approval for this policy as long as it is presented as an opportunity to pay lower taxes or rates


it is presented as an opportunity to pay lower taxes or rates and provided that no one mentions the consequences. People will applaud a policy if they are unaware that they will suffer as a result.
Many members of the public are now waking up to the fact that cuts, far from being painless, are becoming increasingly irksome and fraught with real hardship. We now see a continuing and, in many ways, catastrophic decline in local government expenditure in real terms. More and more local authorities are forced to make cuts in education provision, facilities for the old and disabled, fire cover, road maintenance and in many other spheres. As my right hon. Friend the Member for Manchester Ardwick (Mr. Kaufman) stated, the more local authorities have been prepared to economise, the harder they have
It is not true that Labour authorities are extravagant and that Conservative authorities are prudent. The records of many Conservative authorities are just as open to criticism, as my right hon. Friend the Member for Ardwick demonstrated, on the criteria set by the Government.
The truth is that the system for determining and distributing the rate support grant is not an effective method of measuring and rewarding efficiency. That fact ought to be recognised.
It appeared earlier in this financial year that all areas characterised by rapidly expanding populations were being shabbily treated. Among them, the new towns were probably hardest hit. As the hon. Member for Basildon stated, that was recognised not merely by Labour Members, such as myself, but by Conservatives. I see the hon. Member for Basildon nodding in agreement.
As a result of certain changes, particularly the way housing income has been treated, the situation fortunately altered. I have not yet seen the letter to which the hon. Member for Basildon referred, but I shall be interested to study it. Consideration should be given to introducing into the formula for determining rate support grant a factor which would reflect the particular problems of new towns and other areas where there have been rapid population expansions.
It is frequently necessary, in order to provide for the needs of such populations, to incur heavy capital expenditure on the provision of amenities, at much higher interest rates than those prevailing in past years when other communities were able to provide those amenities for themselves.
When compared with old towns, the position of new towns is analogous to that of an owner-occupier who begins to buy his house today compared with an owner-occupier who began to buy perhaps 30 years ago. In those circumstances, it is wrong and, frankly, idiotic to regard new towns as expanding areas which are extravagant. Their expenditure is higher. The very character of their problems necessitates spending at a much higher level than is true for older communities.
Therefore, I hope that careful consideration will be given to the introduction of a factor in the formula for determining rate support grant which will reflect new towns' problems. However, in the present rate support grant settlement, among the worst hit of the authorities are certain county councils. I shall refer, as did the hon. Members for Harwich (Sir J. Ridsdale) and Basildon, to Essex, to where my constituency is situated.
Essex has not been under Labour control in recent years, and its leaders have always claimed to be strong supporters of the Conservative Party and advocates of prudent expenditure. It is not possible to attack them as being responsible for extravagance or to blame the Labour Party for indulging in extravagant expenditure.
I have frequently been opposed to some of the policies of Essex county council. In some areas it has been prepared to aim at the standards that I and many of my Labour colleagues on the authority desire. I am critical of its failure to provide nursery education, of its lack of generosity with student grants and of the introduction of charges for many services that are available for the less well off. It has been quite wrong in not collecting transport supplementary grant to pass on to support the Epping-Ongar stretch of the Central line in my constituency. I am not intent on attacking the county council. I am merely showing that I speak of its present problems as one who cannot be regarded as an unqualified supporter of all that it has set out to do.
Having made that clear, it is fair to say that the way in which Essex has been treated is little short of disgraceful. The grant-related expenditure figure is the Government's assessment of the amount that an authority needs to spend to maintain a common standard of service. They set Essex's GRE at £450.7 million. However, the Secretary of State has set the target for Essex—the realistic and fair figure that would result in low rate increases—at £415 million—in other words, £36 million below the GRE.
Essex will receive £7 million less in 1982–83 than it received in 1981–82. The Secretary of State is requiring Essex to make draconic cuts equivalent to about £36 million. It cannot possibly carry out those cuts, even on the basis of the figures that have been provided by the Government, without a drastic reduction in services which would hit all Essex people very hard.
There is no equity in the Government's approach. Kent, with a similar population and area, will receive £60 million more than Essex. I appreciate that rateable values in Essex are higher than those in Kent and that Kent should receive more than Essex, but the disparity between the two counties cannot be explained adequately on that ground.
Earlier in the debate the Minister for Local Government and Environmental Services asked about the product of a 1p rate in Essex. He was implying—although the hon. Member for Basildon could not give him a direct reply—that the product had increased considerably. According to the figures that I have, the product of a penny rate in 1981–82 was £2, 309, 000. By 1982–83, it had increased to £2, 333, 000. It is true that it has risen, but the increase is nothing like the proportion that would be necessary to justify the way in which Essex has been treated in this rate support grant settlement.
The vote this evening will determine the position for this year, but the matter should not be left there. I shall vote against the rate support grant settlement, and I hope that Conservative Members who represent Essex constituencies will decide likewise. However, I suspect that even if they do, the Government will still have a majority. None the less, I hope that they will find the means of returning to the specific problems with which the Government have landed Essex. Ultimately, county ratepayers will be hit hard—let it be stated clearly—by the Government, not by any local authority or the Labour Party or the Conservative Party in the country. It is their responsibility. When I receive complaints about the level


of rates, I shall reply that it is the Government who are to blame. I shall use that reply for industrial, commercial and domestic ratepayers alike. As the House knows, domestic, commercial and industrial ratepayers' circumstances concern me greatly.
Everybody knows that industry in Harlow is having a thin time. Everyone knows also that in many instances those who are engaged in small businesses are finding it difficult to continue their operations under this Government. In the circumstances, it is too much for the Government to saddle them with additional rate payments and then to blame local authorities. Responsibility for any cuts which take place in school transport, education provision, social services and other facilities will rest equally in the same quarter.
I shall oppose many of the cuts that the Essex county council may determine to implement. Having said that, I recognise the impossible position in which the county council has been placed by the Government. That is the message that the Under-Secretary of State should take to the Secretary of State and the Prime Minister. It comes from Opposition Members and Conservative Members representing Essex.
It will be no good the Under-Secretary of State, or whoever is to reply, saying "Next year, Essex will do better." What is Essex supposed to do during the current year? What will it do if services have to be cut? Services cannot be left in limbo. We cannot say to employees "Go away and come back for your wages in a year's time when we have a more favourable rate support grant settlement."
The Government have imposed a serious financial crisis upon Essex county council. They should not be allowed to get away with it. I hope that, even at this late stage in the debate, the Government will come forward with other proposals that will enable the people of Essex—whether supporters of the Conservative, Labour or any other party—to enjoy the standards to which they are entitled without having draconic rate increases imposed on them as a result of the Government's policies.

Mr. Michael Brown: The hon. Member for Harlow (Mr. Newens) will forgive me, as a Northern Member, for not following the intricacies of the rate support grant and grant-related expenditure in his county. However, I am competent to speak about the situation in Humberside. The right hon. Member for Manchester, Ardwick (Mr. Kaufman) made a witty, interesting, knowledgeable and lively speech. We always enjoy the right hon. Gentleman's style. He made many jokes about GREs and the way in which the rate support grant settlement has affected counties and towns in Britain.
The right hon. Gentleman ranged far and wide around the country but he did not dare mention the county of Humberside. Only five or six days after the county council, Labour controlled since May last year, announced its rate increase, the right hon. Gentleman knows that it is no joke for the people of Humberside. The rate increase in Humberside is the second highest so far announced in the country.
I thought that the right hon. Gentleman might suggest, if he was being true to his argument, that the Government had withheld a certain amount of grant last year, as, indeed, happened. He knew, however, that he would be unable to get away with that argument. Nor can the Labour

Party in the county use it. If it had been the case, the hon Members for Grimsby (Mr. Mitchell), Kingston upon Hull, Central (Mr. McNamara), Kingston upon Hull, East (Mr. Prescott), Kingston upon Hull, West (Mr. Johnson) and Goole (Dr. Marshall)—the five Labour Members of Parliament representing the county of Humberside—would have been present to criticise the Government. They are not present. They know, as the Labour Party in the county knows, that if they try to use the excuse that the Government have held back funds, the argument will not wash. They know jolly well that the reason for the 61 per cent. rate increase over last year when the Conservative administration left office is due to their own deliberate overspending and profligacy.
Before the local government elections, the Conservative administration, sadly to be defeated, had announced the last of four budgets that it had implemented in its four-year term of office between 1977 and 1981. The county council was at that time extremely well run.. Its leader in the early years was my hon. Friend the Member for Bridlington (Mr. Townend). As a result of pegging expenditure, it was able to reduce the rate last May. However, the electorate, for better or for worse—it knows now definitely for the worse—returned a Labour county council. That happened through apathy. The first action of the Labour county council was to lump on a supplementary rate last October. Not content with that. the county council last Wednesday rendered many constituents and myself speechless. That is not normally a condition in which I find myself, as you, Mr. Deputy Speaker, will know. I have now recovered my speech. I also had the opportunity last weekend to assess the real cost of the rate increase.
I have read in the Scunthorpe Evening Telegraph a statement by the managing director of BSC Scunthorpe on the cost of the rate increase to BSC Scunthorpe just at a time when the steelworks is in profit following many years of problems. I can only say "God help them". The rate of the Scunthorpe borough council—another Labour-controlled authority with which I have to live—has yet to be announced. I predict that it is bound to show an increase over last year.
For the Humberside county council rates alone, BSC' Scunthorpe has to find £3 million. In steel debates in the House, Opposition Members are always anxious, rightly in my view, to point to the additional costs and burdens imposed on the British Steel Corporation in Scunthorpe and elsewhere. A burden of £3 million at this sensitive time can only cost jobs. An irate road haulage operator came to see me at my surgery last Saturday morning. The rate increase means that he will have to find an extra £15, 000. I managed to extract the figure from him only after I had foolishly asked the cost to his company of the rate increase. His first response, when I asked him the cost to his company, was "Two jobs". Throughout the county of Humberside, firms ranging from the British Steel Corporation to the small businesses will be making people redundant because they cannot bear this extravagant burden.

Mr. Dennis Skinner: Is the hon. Gentleman aware that the Government, during nearly three years in office, have caused more than 20, 000 bankruptcies, some of them perhaps in the hon. Gentleman's constituency? Is he aware therefore that one of the main reasons for high rates for commercial, 


industrial and domestic hereditaments is that there are fewer industrial and commercial concerns that can forward money to the Exchequer? The jam is spread much thinner.

Mr. Brown: I cannot accept the hon. Gentleman's argument in relation to Humberside, the county about which I am competent to speak. The hon. Gentleman defeats his own argument. If the British Steel Corporation has to find £3 million to meet the rate increase, that sum will determine whether or not it is viable in the future. I predict that it is the rates that will be the straw that breaks the camel's back: it will break industrial ratepayers. As inflation falls, industrial and commercial ratepayers will find that rates are the largest single burden of costs. This will create the self-defeating cycle that the hon. Gentleman predicts.
There is no excuse, other than profligacy, for the increase in rates in the county of Humberside. When the Labour county council was returned to power it issued marvellous press releases stating that it would create 600 jobs, that it was taking on people and that it would put up the rates. This happened in one of the most depressed areas of the country. Grimsby and Hull both face the problems that afflict the fishing industry and Scunthorpe faces the difficulties associated with the steel industry. At least the hon. Member for Bolsover (Mr. Skinner) takes the problem seriously. The hon. Member for Grimsby and hon. Members representing the Kingston upon Hull constituencies to which I have already referred have been conspicuous by their absence. They know that the rate increase cannot be blamed on the Government.
I cannot speak for Essex. I accept the logic of the arguments of the hon. Member for Harlow. The Humberside county council, Labour controlled, has simply created jobs out of nothing. They are bogus jobs. I suspect that they have been created at the cost of destroying far more jobs, running into several thousand in the industrial and commercial sectors, as a result of the rate increase. There is no question but that Humberside has to trade off services against rates or rates against what the county alleges it loses from the Government. The county council has announced that it will not pay rate increases. It wants to defend its own employees before anything else. The county council has no regard for the industrial and commercial prosperity of the region that pays the salaries of its work force. The county council is deceiving and deluding its own work force. The county council sees itself as nothing more than a self-perpetuating, job-creating agency for 3, 000 or 4, 000 people.
Last week, when announcing the rate increase, the county council stated that it was a question of either putting up the rates by 61 per cent. or losing 3, 000 jobs in county hall. I should like to know what those 3, 000 people are doing in county hall. I want to know what contribution they are making. I am quite sure that, as individual council employees, they all do very good work; but we must be absolutely honest about this and not hide behind the skirts of the old arguments that we must not attack council employees. I do not attack them as individuals. I am sure that all of them, in their own way, do a very good job for their employers, the Labour-controlled Humberside county council. My point is whether their jobs are necessary in their present form.
I should like to know what additional benefit ratepayers in Humberside are receiving today that they did not have 12 months ago now that 600 more people are working in county hall. All that the commercial ratepayer or the householder living in my village receives is the rates bill and he has to sign the cheque or increase his overdraft to meet it.

Mr. Dan Jones: I am sorry to intervene at this point, Mr. Deputy Speaker, because I want to speak myself in a moment or two, but surely the hon. Member should realise that the responsibility is not that of the employees at all; it belongs to those who manage the town hall. That is where the responsibility must lie.

Mr. Brown: I completely accept the responsibility, or rather the irresponsibility, of the Humberside county council in taking on people when there is no money to pay for them except by extracting vast sums from industry which is already hard pressed in the harsh, cold reality of the world outside.
The only point at which I part company with my right hon. Friend the Secretary of State is that I submit that Humberside county council, acting like latter-day highwaymen, like pirates, literally confiscating money from people who have no option but to pay, has abrogated its responsibility and acted in an irresponsible way. Earlier this afternoon my right hon. Friend said that he had resisted the temptation to impose targets on authorities. He said he wanted to preserve their freedom. I submit that the freedom of the so-called democratically elected Humberside county council has been abrogated, together with its responsibility.
I urge my right hon. Friend seriously to reconsider the decision not to set targets in the case of my own county council, for that is the only way in which we may be able to preserve the steel industry, under threat once again after doing its best in the last two years to become competitive. At the end of last year it showed a profit, and now all its forecasts are to be tossed aside because of the irresponsibility of the spendrift and profligate Labour-controlled local authority.

Mr. Arthur Palmer: The hon. Member for Brigg and Scunthorpe (Mr. Brown) will forgive me. He could not follow my hon. Friend the Member for Harlow (Mr. Newens), coming from further north, and equally it would be difficult for me to follow him, because I want to speak about the affairs of Avon county council. I have been longing to do this for quite a time. Before Christmas we had a kind of "dawn raid" by hon. Gentlemen who are not in their places, the Conservative Members for Bristol, West (Mr. Waldegrave) and Bristol, North-West (Mr. Colvin). I also regret what I hope is the temporary absence of the Minister for Local Government and Environmental Services, the right hon. Member for Bridgwater (Mr. King) because Bridgwater, of course, is very close to Bristol and to Avon. This "dawn raid" was a very wild attack on the Avon county council, now Labour-controlled, for being a spendthrift authority, the argument running along the lines to which we are all too accustomed at the moment.
As a Bristol Member of Parliament—Bristol was an excellent county and city in its own right at one time—I was never enthusiastic about the creation of Avon county


council. This was done, of course, by a Conservative Government. The hon. Member for Brigg and Scunthorpe forgets that if there is overlapping, if there is too much bureaucracy in county council work in relation to district council work, it is the fault of that Conservative Government who established these authorities. It very often means—and I am sure that the hon. Member for Southend, East (Mr. Taylor) at least will agree with me—that no jobs are lost at district level and extra jobs are always created at county level. That is where the responsibility lies, with the Conservative Party, which made this possible.
We have this in Avon. In Bristol we had one of the finest all-purpose local authorities in the country, a city and a county in its own right, and we had put round us this ring fence of Avon. The Conservative Government of the time abolished Rutland but created Avon. It was rumoured that this was intended to put a Tory cordon around the traditionally Labour-controlled city of Bristol. At the last county council election, however, the ring fence was broken through; the Labour Party secured for the first time in the short history of Avon a majority on the county council.
Now apparently, under Labour, Avon has committed a crime. It has committed the crime of carrying out the programme on which the Labour Party was elected. It is doing this, as far as I can judge—and I have a letter, from the county treasurer, from which I shall quote in a moment—with as much economy as is reasonably possible. What is the charge brought against Avon by the present Administration, and by the Minister? It is that Avon is carrying out the programme on which the majority of its members were recently elected and is not carrying out the programme of the Conservative Government, elected in 1979.
It is all part of democracy, and I do not complain too much about it, but the Avon county council has been the subject of a sustained campaign of vilification by the local press and local industry because of the rate increases. I shall come on in a moment to the practical reasons for those increases. As I say, the burden of the complaint has been that the voters of Avon have no right to have the programme for which they voted carried out, and that the county council must be content simply to carry out the programme on which the Government were elected three years ago.
What are the results of the Government's policies? Figures released this morning show that this country's industrial output is now less than it was 15 or so years ago. Indeed, it is less than it was during the three-day working week. I do not know whether that is a triumph of Conservative economics and financial policies, but it seems to me that those in Bristol who say that they speak for local industry would help their own businesses and employees if they protested against the Government's monetarist and credit policies, which are ruining this country's industry. However, the Bristol chamber of commerce and the local representatives of the Confederation of British Industry complain about the burden of county rates instead.
I met the CBI local spokesmen last summer on what was a very pleasant evening, both outside and inside. They were most courteous. We discussed many subjects, including the difficulties that were placed in their way when seeking loans for productive investment. But they

said not a word to me about the local rates creating unemployment. I think that that was because it had not then become the fashion to do so.
When the representatives of local industry recently talked to the leaders of the Avon county council they were asked to tell the council what cuts should be made. Those representatives, by the way, never said a word when the council was Conservative-controlled. Do they now want cuts to be made in education, on which they depend so much for the training of their employees? Do they want the cuts to be made in expenditure on the roads? As those roads were maintained, or not maintained, by the previous Conservative majority, they were nothing less than a disgrace. Does local industry accept that? I was interested in what the hon. Member for Brigg and Scunthorpe told us about his road haulier who talked about the high level of his rates. Did he also complain about the condition of the roads? These things are not in separate compartments.
We often hear employer complaints about excessive local government spending, but I have recently received letters and circulars from the building construction industry and the architects of Bristol and district. The architects are particularly noisy on the subject, saying that there is not enough local government expenditure to sustain the balanced level of building and construction locally. They are right but they cannot have it both ways.
As an answer to what Conservative Members for the city of Bristol said some time ago I want to read front a letter I received from the county treasurer of Avon, at my request. He writes in the rather flat style which is typical of local government officials—very clear, of course, but with no poetry about it:
I would like to draw your attention to the following points:—

A.The major factor in the need for the Supplementary Precept was the loss of £12.4 million Rate Support Grant.
B.Even without the additional expenditure proposals approved by the newly elected Council, the County would have suffered a Grant loss of £10.2 million."

I am glad to see that the Minister for Local Government and Environmental Services has returned to the Chamber, because I am talking about a county next to his own, which he knows very well.
The letter continues:
C. Even with the additional expenditure proposals, the County plans to spend less in real terms than in the 1978/79 base year which the Secretary of State has arbitrarily chosen as his target.
The county treasurer adds, bitterly, I think:
This contrasts with the growth in Central Government expenditure of over 7% in the same period.
Why should the Government demand that local authorities cease to put right the neglect of years before? Why should they object to local authorities carrying out the programme on which they were elected, when the Government are apparently incapable of carrying out their own programme in the matter of Government expenditure?
I have also received some figures, with which Ministers will be familiar, for the average domestic rate payment per household by county in England, expressed in pounds per week. It is interesting to note that Avon—so much attacked, criticised and vilified for its so-called spendthrift policies—is well down the list. Indeed, there are 14 Conservative local authorities that are spending more per household than Avon. I would draw that to the attention of the Minister.
When the county treasurer wrote to me he enclosed an article that appeared in Local Government News. I wish to


quote one paragraph because it raises an interesting constitutional point. I am sorry it is a little long but I did not write it. It was written by a learned professor, Professor John Stewart. He says:
Once central government has committed itself to targets for individual local authorities, it has crossed a constitutional divide. It has moved from a concern at the national level into an area which is not its responsibility but is the responsibility of individual local authorities. The danger is that with central government committed to targets, alleged failure to achieve those targets is seen by central government as defiance. Yet a local authority failing to achieve a target is a local authority carrying out its proper responsibility to determine its own level of expenditure or its own judgment of local needs. It is merely that its judgment, in its proper area of concern, differs from central government's judgment in an area that is not its area of concern.
There is a fascinating international thing about this Conservative Government not of the Centre but of the Right; some might say of the extreme Right. Across the Channel in France, where there is a Socialist Administration under President Mitterrand the traditional central control of local government by Paris is being steadily 'relaxed. From the point of view of French democracy that is excellent. On this side of the Channel, under a Government of a very different political outlook, centralised control of local government is being strengthened all the time.
I should like to ask the right hon. Gentleman one question that should provide an interesting answer. If it is right for a Conservative Government to compel local authorities to cut expenditure to fit in with the national programme of priorities, will it be right for a Labour Government to compel local authorities to increase expenditure where they are neglecting social needs? What is sauce for the goose should constitutionally be sauce for the gander.

Mr. Neil Thorne: I listened with interest to the hon. Member for Bristol, North-East (Mr. Palmer). I shall not comment on his speech immediately, because I hope to develop later one or two points that he mentioned.
My hon. Friend the Member for Brigg and Scunthorpe (Mr. Brown) said that he was not competent to follow the speech of the hon. Member for Harlow (Mr. Newens). I am sorry that the hon. Member for Harlow is not in his place, because I should have liked to make one comment to him. I understand his concern for Essex. It is proper for him to advance the cause of that authority. However, I do not share his concern to the same degree, because my constituency, now forming part of the London borough of Redbridge was liberated from that county under the London Government Act 1963.
I am sad to say that we have only just received permission for our town centre scheme after 30 years of effort. Rightly or wrongly, the feeling in the local council was that Essex county council was doing all that it could to stop the advancement of our scheme before 1963 because it felt that if we obtained permission for it and expanded, as we expected to do—as had Croydon, East Ham, West Ham and other authorities nearby—we could have applied for county borough status and had we received it, our rateable value would have been removed

from the Essex county council. I do not therefore have too much sympathy for Essex county council today, because we had so much trouble getting our scheme under way.
I support what the Government are trying to do in getting the public sector borrowing requirement under control. One of my major regrets is that the Government did not get the public sector borrowing requirement under control quickly enough. Many of my constituents who have small businesses and who are paying exorbitantly high interest rates on their borrowings felt that local government was having too long a honeymoon with the Government after they came to office. I know that it was not easy to achieve control over local government expenditure, which now accounts for much of our national expenditure. I served on the Committee on what became the Local Government, Planning and Land Act 1980. It took some time for the Government to get the necessary power to do what they were elected to do. Because of that, it was over two years before the Government were fully able to implement what the electorate undoubtedly elected them to do in the first place.
I was interested to hear the hon. Member for Isle of Wight (Mr. Ross) express his interest in a form of industrial derating. Many years ago, our predecessors realised how important industry and commerce were to the well-being of the country in general and in providing employment. If my memory serves me correctly, they provided a derating system that made those industrial ratepayers pay only a quarter of their total assessment. I do not advocate a return to that system, but it demonstrates the feeling in the Chamber during those years that it is important to provide the right environment for employment.
I have heard it said that, however high local rates are raised, one is talking only about 1/2 per cent. to 3/4 per cent. on a firm's bill. That may appear to be a small figure, but, when one considers it overall and realises that the majority of business enterprises now produce only about 3 per cent. profit, 1/2 per cent. to 3/4 per cent. is a substantial proportion. Undoubtedly it can mean the difference between survival and bankruptcy for firms oprating on those margins.

Mr. Palmer: In making that balance, does the hon. Gentleman allow for the services that industry receives from local government in the form of roads, sewerage, waste collection and education? Those are gains to industry for which it should pay.

Mr. Thorne: The hon. Gentleman has got it wrong. Sewerage charges are paid through the water rates, not through general taxation. Industry must pay separately for its rubbish to be removed and it must pay substantially for its transport. The road fund tax that it pays goes into the Government's coffers and is more than enough to pay for road maintenance. The examples that the hon. Gentleman advances are not correct, because industry and commerce do not receive the benefits that he mentioned out of that expenditure.
For this reason, I should like taxation of commercial and industrial property to be transferred to central Government. The rate should be levied so that it is paid into central Government coffers and the services provided and adminstered by local government should be funded by central Government. For example, my right hon. and learned Friend the Member for Runcorn (Mr. Carlisle) suggested that education charges should be covered by the


Government. That would be ideal. In addition, the police and fire services should follow suit and be dealt with in this way.
Rates for industry should be on a common basis. It is wrong that a firm, employing a large part of the labour force of an area should pay perhaps twice the rate poundage of another firm on the other side of the road. It is in the interests of the Government to preserve and foster employment as they are left to pick up the bill for greater unemployment through unemployment and social security payments. It is wrong that there should be such a variation in' the level of charges to industry.
However, local government should have a fair measure of decision-making of its own. I do not believe that everything should be taken over by central Government, but, like the hon. Member for Bristol, North-East, I am concerned to ensure that this does not happen. I fully support what the Government are trying to do, but the method that has been adopted is not the best. If local people elect a particular type of local government, then the cost of their decision should fall upon the electors' heads, and they, particularly in the residential sector, have a right to determine what they will pay as local taxes.
The Government will soon have to examine rating revaluation. No one has suggested that the industrial and commercial sectors should not have some form of local property taxation. I have been pressing Ministers for some time to bring us up to date because the longer we leave revaluation the worse will be the disparity among different areas. Here I should declare an interest as a chartered surveyor. Rateable value should be assessed on the same basis throughout the country. If this is done properly it will be possible to compare equally different parts of the country—for example the North with the West, or the Midlands with the South-East. There should be a common basis, but the longer the revaluation is left the worse the situation will become.
I hope that the Government will soon take some decision on whether there will be a capital or a rental basis for the commercial sector. The Government will then have to decide what they will do about the residential sector, and whether the present system will be replaced in total or in part. Various systems have been suggested, including a form of poll tax, and there is a possibility that the existing type of rating should be continued.
However, I hope that the reform will not be on the lines of the present system. It is far too expensive to rate every residential property individually. I should like a type of banding valuation. Moreover, it would avoid the bad feeling that is generated when people improve their properties. If people improve their properties by adding an extra room or central heating, they resent the fact that it will affect the local tax that they pay. I know that certain exemptions have been introduced in recent years to prevent that from happening automatically. Nevertheless, the valuation officer still has to carry out a valuation in each case to establish whether the limit has been reached. It is an enormous waste of civil servants' time and energy, and it is wrong to penalise people for modestly improving their private residence.
I applaud the Government for introducing the Green Paper. I am glad that they are consulting widely on this matter, and I hope that they will quickly reach a decision so that we may know what form local taxation will take in future and how it will be administered.

Mr. Guy Barnett: In spite of all the protestations of the hon. Member for Ilford, South (Mr. Thorne), he made a highly centralist speech, first by suggesting that education and other services should be centrally funded, and secondly by suggesting that firms operating in an area should pay not rates but taxes to central Government.
I value the fact that firms pay rates to local authorities, because it means that those firms have the right to knock on the door of the local authority and demand the roads and other services that they need for the successful pursuit of their business. Moreover, the local authority then has an incentive to improve the environment in which business can operate.
No doubt there have been times in our history when local authorities have paid too little attention to the needs of local industry. However, during the past few years there has been strong evidence from many parts of the country that local authorities now recognise that if they do all that they can to encourage the development of local industry and increase the rateable value of that industry the community as a whole stands to gain. Moreover, many' local authorities now recognise the value of encouraging local industry as a means of alleviating local unemployment.
The speech of the hon. Member for Ilford, South reflects several of the speeches that I have heard this evening. In some ways, it is a sad commentary on the Government's policy and legislative programme for local government since they took office. I recall the Second Reading debate on the Local Government, Planning and Land Bill, when I predicted that the inevitable consequence of that legislation would be the necessity to discuss the detailed policies of local authorities on the Floor of the House. The ultimate consequence of that legislation and the Local Government Finance (No. 2), Bill which is now in Committee, is that decisions which in the past have been taken by local authorities are now taken by the Government.
Last night I was present at a meeting of the social services committee of the London borough of Greenwich. I and many other people were protesting at the threatened closure of the Vanbrugh day nursery in my constituency. The crowd there included single-parent families w ho are heavily dependent on the nursery because, without it, they could not go out to work and they would then be dependent on unemployment benefit, and in many cases supplementary benefit, too. The nursery has a high priority in my constituency.
A councillor told me that it was no good going to the meeting, because the grant had been cut by £2 million. He said that the council was having to make cuts. He said that the priorities were right, but that the budget had been cut in such a way that one would be justified in protesting only to the Secretary of State for the Environment and to the Secretary of State for Social Services. He said that they—and not the councillors—had made the decisions. The councillors did not want to make those decisions. They wanted to keep the nursery open. However, given the budgetary situation, there was nothing that they could do to alter the decisions. I hope that the nursery will stay open, but nevertheless that is an illustration of the difficulties facing local authorities as a consequence of the Government's centralist policy.
There are other and more dangerous implications of the way in which the Government have assessed the grant-related expenditure. In the debate on Second Reading of the Local Government Finance (No. 2) Bill I said that the grant-related assessment for my borough was roughly £36 million and that the spending level during the current year was about £50 million. If an element is allowed for inflation, if the borough is to retain the services that it now operates, it will need to spend about £55 million. The target figure that the Government have chosen from goodness knows where is £48 million. That means an overspend of £7 million.
Greenwich is described as an overspending authority, yet the House will recall that in the Local Government, Planning and Land Act there is a requirement on local authorities to describe, according to certain formulae, the cost of running their services. During his speech the Secretary of State compared the cost of services run by one authority with those run by another. There is an incredible situation in my borough. We are told to compare the services of my borough with those run by other inner London boroughs. Greenwich is described as an overspending borough.
I want to compare the expenditure figures for Greenwich with the average figures for inner London. For instance, the net annual cost of providing all council services for every 1, 000 of the population in Greenwich is £222, 291. The inner London average is £318, 131. In Greenwich, the figure for rent arrears, as a proportion of the rent collectable for the year, is 4.5 per cent. I make no criticism, but the figure for Lewisham is 12.4 per cent. and for Southwark 8.48 per cent. I do not know the circumstances, but no one could describe Greenwich as an inefficient borough on that basis.
Let us take the cost of libraries. The net annual cost of library services for every 1, 000 of the population is £8, 494 in Greenwich. The inner London average cost is £12, 302. I could go on to describe case after case to show how Greenwich compares favourably with the inner London average. The number of administrative staff for every 1, 000 of the population in personal social services in Greenwich is 0.90. The inner London average is 1.12. The net annual cost of personal social services for every 1, 000 in Greenwich is £77, 086. The inner London average figure is £103, 857. Last month the Minister pointed out that Greenwich's needs may be different from those of other boroughs. He said:
The hon. Member for Greenwich (Mr. Barnett), in referring to comparisons of GREs, spoke only of standards of service. He will know that, like the previous needs assessment, the size of the client groups also influences the overall GRE per head—a point that perhaps he did not take fully into account in his contribution."—[Official Report, 18 January 1982; Vol. 16, c. 112.]
I did take that into account. The difference between the needs element and the present situation is that the grant-related assessment expenditure figure has been invented by the Department of the Environment and is not in any sense objective. I wish that the Minister would understand that under the previous system of multiple regression analysis there was some objectivity, because that figure was related to and in part determined by expenditure levels by groups of local authorities as a whole.
That is the essential difference between the system being operated now and that operated under multiple

regression analysis. In some of the speeches that I have heard there has been almost a feeling of "Come back multiple regression analysis, we need you." The incredible system now being operated results in the absurdities mentioned by many hon. Members and which are also true of my local authority. The Under-Secretary of State, Lord Bellwin, will see a deputation from my local authority soon. I hope that they will carefully examine together the systems implications for my authority and for other authorities. Local government, as I understand that phrase, will become increasingly impossible to operate.

Mr. Kenneth Lewis: When my small county of Rutland was taken over by, or pushed over into, Leicestershire, some years ago, I said that the modest rates that we then paid would escalate. They did. Indeed, as far as I can see they will continue to escalate.
People said that I should not worry because everyone would get more for their money. The area was supposed to lack services. For example, I was told that the area was somewhat short of services for mental defectives. I did not think that anyone thought that we had any mental defectives unless some people put the Member of Parliament or other politicians in that category. Those in my district would tell the Minister today that services have not improved, or have been only so slightly improved as to be hardly noticeable. In recent years many people think they have decreased. I suppose that we are all experts on rates and taxes, because we all have to pay them. I believe there should be a balance between the rates paid and the services provided. I am not one of those hon. Members who say that rates must be kept so low that services wither away. I like my district and county councils to provide reasonable services. By and large, my area gets them. It is extraordinary that some councils have managed with rate increases that are within the rate of inflation and that some have even managed with rate increases that are below the rate of inflation. One of my councils, Lincolnshire, will increase rates this year by a figure that is below the rate of inlation. In Leicestershire, however, rates will increase by about 30 per cent. One wonders why one council spends so much more than another.
What is most extraordinary is that many of the councils in areas where unemployment is highest and where industry is having the greatest difficulty are the ones that are putting their rates increases through the roof. I wish to make two brief pleas to the Ministers who are struggling with this problem. I congratulate them on that struggle because it is a difficult problem. Their objective must be to press down in order to bring reason back into the system, because reason has gone out of the system in recent years.
My first plea to the Ministers and to those who are running the councils, if they have ears to hear—the plea has been already made by a number of my hon. Friends—is that it is vital that industry should not have to carry on with this built-in burden that increases every year. I wonder whether hon. Members appreciate that rates are the largest tax imposed on industry. In many cases, industry has to pay little or no corporation tax. Industry is encouraged by Government not to pay corporation tax because it is allowed to write off all manner of investment to avoid paying that tax. Is it recognised that, in money terms, rates are twice as high as the national insurance surcharge? That position has only developed in recent


years. National insurance surcharge was introduced as a tax. Like all taxes, once it is introduced it is difficult to get rid of it. It is now built into the system although I hope that the Chancellor of the Exchequer will do something about it in his Budget speech. However, the fact remains that national insurance surcharge is now less than the burden imposed on industry through rates.
High rates on industry and commerce mean fewer jobs. Therefore, unless councils are realistic and understand that they must keep rates down for industry, there will be more and more unemployed. The unemployed then go on to the dole and become another burden on the rates because once they claim social security they have the advantage of rate rebates. Therefore, there is a vicious circle of unemployment leading to a greater burden placed upon the local councils because they have to finance some of that unemployment. All these problems arise because rates are too high on industry and it is forced to shed jobs.
My second plea is that in the coming grant considerations—we had a second review last year, and we may have a second review this year—the Ministers should bear in mind that councils that are doing their best should be encouraged. Good councils should continue to be encouraged because the councils we want to assist are those that are economical and those that have a fair balance between good services and reasonable rates.

Mr. Dan Jones: I do not intend to speak for more than five minutes, in deference to the needs of the Minister of State. I would not speak at all if it were riot for the fact that I wish to bring to the attention of the House what I honestly believe to be an injustice.
The Secretary of State has found for Blackpool about £9 million in grant. He has found for Burnley about £5 million in grant. That is a difference of £4 million.
In terms of economic advantage to the country, Burnley is of greater value. Since before this century, Burnley has regularly produced what the country wanted. There was an occasion when two Labour Ministers came to Burnley wanting a change from textiles to other industries. They thought that Burnley would profit by that change of industrial structure. The unions wanted it, but the work force preferred, and stuck to, textiles.
On the other hand, Blackpool has constantly been a seaside resort. I have nothing against Blackpool, but I believe that the Ministers should analyse the figures and find out if they bear any relation to justice. I do not think they do.
The people in Burnley are extraordinarily moderate. Since I have been there they have never been on strike. Were that so everywhere, I would boldly say that the country would be in a finer economic position than now. I hope that the Ministers are taking heed of that instead of whispering to one another.
Burnley has made a handsome contribution to the country for a long time. It must be reasonable to believe that, as it has had over 100 years of industrial experience, the town has achieved a certain standard. As a consequence I should like the Minister to examine the figures that show that Blackpool has an advantage of £4 million over Burnley. He should give me an answer about the authenticity of the figures and their justice.

Mr. Teddy Taylor: I am sure that Ministers and Opposition spokesmen appreciate that rate support grant orders are never popular. This order involves a reduction of the Government's contribution from 59.1 per cent. to 56 per cent., which makes it especially unpopular. It represents a direct increase in taxation in a roundabout way.
The Secretary of State will be fully aware that, apart from the complaint about the general reduction about which everyone is concerned, the redistribution on top of that and the hammering of other authorities involves injustice. I hope that he will accept that there is injustice in the figures for Essex.
We accept that for all authorities the rate support grant order will involve special problems and increased rates. However, the Minister must also accept that Essex is suffering a further blow amounting to about £71/2 million, which appears to be unjust.
I should like the Minister to explain to the ratepayers of Essex why there has been a further redistribution in the formula. Ratepayers in Essex, particularly Southend, find it difficult to understand why the redistribution gives a significant bonus to substantial parts of inner city areas and to many authorities that have openly been defying the Government in all their policies.
The ratepayers of Essex find it hard when they hear leaders of the Greater London Council announcing that. although they have increased spending by 50 per cent.. they still think that some ratepayers in the GLC area will have their rates cut this year because of a substantial increase in Government grant. How can that be fair? We know that both Labour and Conservative Governments are often accused of rigging the rate support grant so that their friends are helped. However, the Minister will appreciate that there is no possibility of the present Government being accused of that. They have hammered those who supported Government policy 100 per cent. and gone out: of their way to give a bonus to those who flouted and openly defied it.
It is also difficult to understand why a special bonus is given to areas which have suffered from race riots. If expenditure in connection with race riots is to be disregarded under the formula, is the Minister suggesting that if towns in Essex had had some race riots they could have enjoyed a significant bonus?
The Minister will know that Southend has led Britain in its policy of privatisation, prudence and enterprise. As a result, last year it was able to cut the borough rate. The Minister may not know, however, that only yesterday it was announced that the borough has frozen its rates for this year. Having reduced its rates last year, it has managed, despite inflation and a cut in Government grant, to hold its rate this year. That unique achievement is largely the result of our policy of privatisation, which has achieved a major saving for the ratepayers, better services and higher wages for those employed in the services.
How can the people of Southend be happy when, having achieved that miracle of local government efficiency and reorganisation, they are told the next day that the average ratepayer in Southend will be paying about £1 per week more next year, not because of any failure on their own or the borough's part, but because the Government have introduced a policy which especially hammers Essex?
I recently moved from Glasgow to Southend in circumstances of which most hon. Members are aware. [HON. MEMBERS: "And nearly had to go back. Yes, I almost had to go back, but I now enjoy Southend very much. Having moved to Essex from Glasgow, I have been very conscious that Southend is in no way a lavish authority which wastes money. My children go to school in Southend, and I was surprised to find that this year they had a horrifyingly long Christmas holiday, but their summer holiday has been cut to five weeks, making it very difficult for the average person to fit in holiday arrangements. That had to be done simply to save money on heating schools during the Christmas period. Unlike Glasgow, Southend has no local authority nursery schools because it simply cannot afford them in its budget. I can find no area in which there is waste, although there must be some. Certainly, it seems to be an astonishingly prudent council compared with my previous area, although the rating burden seemed lower to me as a householder.
Essex is especially hammered, first, because it has been prudent in the past and thus has not the same scope for cutting. Secondly, rateable values are high. That problem is largely historic as there has been no revaluation south of the border for a long time, and an area such as Essex with many new properties clearly suffers. The Minister will have heard from the excellent speeches of my hon. Friends the Members for Harwich (Sir J. Ridsdale) and Basildon (Mr. Proctor) and from the hon. Member for Harlow (Mr. Newens) that Essex has a justifiable grievance. I hope that the Minister will accept that there has been injustice to Essex, and especially to Southend which went out of its way to cut rates last year and to freeze them this year, despite having to pay more for the county rate. I hope that the Minister will accept that there has been injustice and will tell us that he intends to do something about it.

Mr. Gordon Oakes: It is astonishing that this debate is and has been throughout so ill-attended by hon. Members of all parties. I should tell the Secretary of State, who has not been present a great deal himself, that hon. Members on both sides have been conspicuously absent. As the right hon. and learned Member for Runcorn (Mr. Carlisle) said, we are discussing one quarter of public expenditure in this country. Our discussions affect every hon. Member because we all have a local council relying on us to deal with and to debate grants with the Government. Therefore, it is astonishing that this debate is so ill attended.
That is not because hon. Members on either side of the House are uninterested in what is happening. They merely pick up the three or four documents issued by the Government on the rate support grant, read them, consider the "multipliers", which mean six decimal figures against their own authorities, and find that they cannot understand a word that has been presented to the House. That is the truth of the matter. When debating the Local Government, Planning and Land (No. 2) Bill in 1980, I remember the Secretary of State saying that he was introducing a new system to simplify matters. That statement was similar to what my right hon. Friend the Member for Manchester, Ardwick (Mr. Kaufman) said earlier, about the right hon. Gentleman's clarification.
There is a smokescreen over the important issues. The important issues have been mentioned by hon. Members on both sides of the House, particularly by my hon. Friend the Member for Ashfield (Mr. Haynes). In a brilliant and compassionate speech he referred to a 68-year-old constituent who has a mother of 96 years of age and does not have a home help. That is what the debate is about, and that is the essential nature of our discussions.
My hon. Friend the Member for Greenwich (Mr. Barnett) referred to a nursery school. He was told that the borough had no more money to spend upon it.
I hope that hon. Members on both sides of the House will not be put off or terrified by what the hon. and learned Member for Hemel Hempstead (Mr. Lyell) called "gobbledegook" and what the hon. Member for Isle of Wight (Mr. Ross) called "jargon". The essential nature of our discussions is the bread and butter issue of deprivation in local authorities that results from the Government's actions in successive rate support grants.
As my right hon. Friend the Member for Ardwick said, the only mention of grant abatement that is made in any of these documents is in the rate support grant order for next year. That suggests that provision will be made in the Local Government Finance (No. 2) Bill.
To this minute local authorities have no idea what is going on or, when fixing their budgets, what will happen. It may be said that a Bill is going through Parliament, but it is not yet law. As we say in Lancashire, "There is many a slip betwixt cup and lip." There have been so many slips "betwixt cup and lip" on this issue that it is almost unbelievable. Clause 4 of the Local Government Finance (No. 2) Bill is not as it was referred to when the rate support grant paper was written. A completely different clause has been introduced as the result of an amendment proposed by the hon. Member for Hornchurch (Mr. Squire). We debated the new clause 4 at the last meeting of the committee.
My right hon. Friend the Member for Ardwick and I would dearly love to quote the debate that took place last Thursday in the course of moving the amendment to clause 4. The rules of the House, of course, rightly do not permit that. However, I have news for the House. The amendment to clause 4 that we debated last Thursday is now old hat. Further amendments, as I understand it, have been tabled today by the Government. Therefore, we shall discuss yet another clause 4 when we meet on Thursday. The Government have created confusion for local government and Opposition Members—indeed, for the whole House. In the rate support grant settlement we are dependent on legislation that has not been passed or finalised.
The truth is that the Government do not really know what they want to do. That is why we have the ridiculous discrepancies between authorities that hon. Members on both sides of the House have quoted in the debate.
There are two crucial considerations to be applied to the rate support grant settlement for England for 1982. Some hon. Members have discussed them, but they have been avoided by many because of concern for individual authorities and concern about all the gobbledegook to which the hon. and learned Member for Hemel Hempstead referred. However, the crucial considerations were taken up by the right hon. and learned Member for Runcorn, who is my near neighbour. Our constituencies share an authority. I was delighted to hear the right hon. and learned Gentleman speaking again from the Back


Benches. His speech, though loyal to the Government, was constructively critical. It was not an example of the whining speeches that we sometimes get from ex-Cabinet Ministers who have lost their positions. Far from it. It was a good Back-Bench speech.
The right hon. and learned Member for Runcorn fairly said that one of the crucial issues in the RSG is the reduction in Government moneys from 59.1 per cent. to 56 per cent. That means that local authorities will get less Government money. They will have to cut their vital services or increase their rates, or both. Nearly every authority, Labour or Conservative, has received less, cut vital services and increased its rate. Authorities have cut their services to the bone, yet have had to increase their rates.
Crocodile tears have been shed by Conservative Members on behalf of the poor ratepayer, especially the industrial ratepayer. The hon. Member for Ealing, North (Mr. Greenway) even suggested that Hoover closed because of the high level of rates. That was an astonishing suggestion. Apparently, the closure had nothing to do with the recession. We were told that it was the local authority's rate that closed the company. The reality is that the Government are forcing local authorities to increase their rates for domestic, industrial and commercial ratepayers. That is what happens when the Government reduce the rate support grant settlement by 3.1 per cent. If the Government had real concern for ratepayers, let alone the spending needs of local authorities, they would have adopted a policy that operated in the reverse direction.
The previous rate support grant was based on the assumption that the rate of inflation for local authorities would be 6.7 per cent. That assumption has never been altered. Indeed, it has not been altered in the supplementary report. The Government know that that is a fictitious figure. I am talking not about deterring future expenditure but about past expenditure. The Minister for Local Government and Environmental Services knows that the current rate of inflation is about 12 per cent. and that wage settlements made during the year have been considerably in excess of the figure set by the Government. That is history.
The same ridiculous assumptions are being made for next year's rate support grant. Are the Government saying that when they decided upon 9 per cent. for the whole of next year they sincerely believed that inflation next year would decrease to 9 per cent. or lower? Do they believe that now? Even the most optimistic figures suggest that the rate of inflation will be about 10 per cent. by the end of the year. Local authorities will have to pick up the tab for that. We cannot judge local authority expenditure fairly on the ordinary cost of living index. The index that is relevant for local authorities is totally different from that for ordinary families. For example, if food prices moderate, that movement will be reflected in the cost of living index and families will benefit, but that will not have a great impact on local authorities. Fuel price increases, for example, have a great effect on local authorities. Local authorities are affected just as much as industry. Only yesterday we heard that gas prices are to be enormously increased during the next 12 months. Most schools and local authority offices are heated by gas. Post and telephone charges are a major item of expense for local authorities. They do not have much effect on the ordinary cost of living index, but they have an enormous effect on local authorities' expenditure. The price of school

textbooks has increased. For years inflation has raged in education expenditure. Some schools have no books worthy of the name. Instead of books being beautiful objects to handle they are old, tattered ruins. That has a terrible psychological effect on children and on the way in which they approach books.
The inflation faced by local authorities is totally different from that faced by ordinary families. But the Government take no account of that. They do not even take the ordinary cost of living inflation into account. Not only have the Government reduced the total grant from 59.1 per cent. to 56 per cent., but they have added the further burden on local authorities of a false rate of inflation built into the order. The local authorities either have to make cuts or increase rates.
The Secretary of State says that it is necessary to take these stringent measures because one can see from the expenditure per head of population, or per thousand, how much the figures differ between authorities. Surely, he says, there is room for pruning down and prudence. He gave a number of examples of differences in local authority expenditure per thousand people. What, therefore, will the Minister say to my hon. Friend the Member for Greenwich? That exemplary authority in the London boroughs and the South-East of England has figures that are better than most of the other boroughs. But, lo and behold, according to the Secretary of State, it is an overspending authority. What can one do to satisfy the Secretary of State?
My right hon. Friend the Member for Ardwick referred to the rate for the red areas of East Sussex, Essex and Wiltshire, which are, presumably, deliberately overspending. I concentrate on Essex because there are a number of hon. Members from that county—the hon. Members for Basildon, for Southend, East (Mr. Taylor) and for Harwich (Sir J. Ridsdale) and my hon. Friend the Member for Harlow (Mr. Newens)—all of whom are loyal to their county. They spelt out to the Government the evil and insane effects of the present rate support grant figures. My hon. Friend the Member for Harlow spoke on behalf of a Conservative-controlled county council because he is a democrat. He does not believe in its policies but he believes in democracy and the right of Essex to spend its money in its own way. Essex has not been an imprudent authority, yet it is placed in a deplorable and disgraceful position. Whatever else the Minister does, he must explain to the House, and to the people of Essex, how the county has offended the Secretary of State so much that it should be so cruelly treated by him, after having tried its very best, as so many have done, to follow the dictates of the Secretary of State. As my right hon. Friend said, the more one tries to follow the dictates of the Secretary of State, the harder one is hit as a result.
The right hon. and learned Member for Runcorn introduced a breath of common sense when he stated that, in his opinion, as a former Secretary of State for Education and Science, it is impossible to go further with education cuts. I am sure he is right. As a former Minister of State for Education I agree that education cannot be exempted. Two-thirds of expenditure by local authorities goes on education. The right hon. and learned Gentleman gave a clear warning, however, that one cannot cut further. Yet, when the totality of the rate support grant is cut, that is precisely what the Government are doing. Two-thirds of the burden will inevitably be borne by education.
The right hon. and learned Gentleman also asked what was meant by overspending and argued that the policy could not be pursued on a historical basis. I am sure that the right hon. and learned Gentleman is right. All the anomalies that arise in the difference between grant-related expenditure and targets result from the Government trying to act on a historical basis.

Mr. Mark Carlisle: I stated that it would be wrong to cut further on the limit of relevant expenditure for education which I accept is that proposed when I was Secretary of State for Education, including the additional £60 million cuts that the Prime Minister announced. I was not suggesting that it had been cut further. I stated, however, that I would oppose any further reduction in that level of expenditure.

Mr. Oakes: I agree. I hope that I did not misinterpret the right hon. and learned Gentleman. Inevitably, as a result of this rate support grant settlement, education, like other services, will be cut due to the reduction in the total amount of money given to local authorities and the built-in figures for inflation, which are false figures.
My hon. Friend the Member for Blaydon (Mr. McWilliam) and the hon. Member for Isle of Wight made the valid point that we should stop kicking councillors. They perform an extremely useful service. It is no use blaming the media for the attack on local government. The attack on local government is led by the Government and by Conservative Members. They are the first to call all local authority workers bureaucrats. They are the first to suggest that all councillors, Tory or Labour, are hell-bent on overspending and being profligate with ratepayers' money. They lead the attack.
It is wrong, however, for hon. Members to imply that local government is wasteful. It is not half so wasteful as central Government. It is not half so wasteful when decisions are made on the spot by elected local people rather than by civil servants in Whitehall. Yet the whole idea of grant-related expenditure is precisely a case of officials, people, or a computer, taking decisions. It may sound unbelievable, but I understand from my right hon. Friend the Member for Ardwick that it is an American computer. I wonder whether the Minister can explain why we need an American computer to work out this matter. Are the complications of the rate support grant so horrendous that no British computer can deal with the matter and we need an American space age computer for this purpose?
I am pleased that the hon. Member for Basildon will vote with his feet by joining us in the Lobby tonight. I do not agree with his remarks about his hon. Friend the Under-Secretary of State and the responsibilities that he has been given. The Minister has a difficult job. It is an important job. We on the Opposition Benches wish him well. I do not like to hear an hon. Gentleman attacked before he has even started a job. Despite my strictures, I welcome the hon. Member for Basildon into our Lobby. I wish that other Conservative Members would act as honestly as the hon. Member for Basildon and join him in our Lobby.
We have heard from a number of authorities. I am not going to go into the specific complaints of different authorities. Suffice it to say that, from the debate we have heard tonight, this is a bad report and a bad rate support

grant. It is illogical and totally mean and will bring a great deal of distress to many needy and disabled people in this country. I hope that this House votes resoundingly against it.

The Minister for Local Government and Environmental Services (Mr. Tom King): I start by agreeing with one thing: this has certainly not been the best attended debate I have ever seen in the House of Commons. One may draw certain conclusions from that. I do not pretend that rate support grant orders are the most thrilling stuff of which Parliament is made, but they are often a barometer of unhappiness and disquiet about some aspects of these matters.
As has been said very fairly, in every settlement—and this point was made to the right hon. Member for Manchester, Ardwick (Mr. Kaufman)—anomalies and difficulties are inevitable. This happens every year. Certain authorities feel very disaffected by the settlements. Every year, therefore, there are safety nets and changes are made to try to protect authorities from the more extreme variations.
We are discussing three motions. The first is on the Rate Support Grant (Increase) Order 1982, for the year 1980–81, in which we have confirmed that, in view of the overspend outturn in that year, we shall be withholding the £200 million which my right hon. Friend the Secretary of State intimated on an earlier occasion would probably be the case; therefore, it covers £84 million, in connection mainly with adjustments for interest and loan charges. We have confirmed the position with regard to the transitional arrangements affecting certain authorities and have said that we shall be writing to those authorities with those amendments which my right hon. Friend has made in the light of the representations that they have made to us.
We also have before us the Rate Support Grant Supplementary Report (England) 1982, for 1981–82, involving £122 million of grant on higher loan charges and the updating of certain of the grant-related expenditure assessments. We have confirmed that we shall be laying before the House a further supplementary report for 1981–82 to confirm and clarify, after the clarification of the legal situation, the whole of the back arrangements for those in excess of volume targets and GREs in 1981–82.
The main matter before us is the Rate Support Grant Report (England) 1982–83. This involves, against an estimated £20.5 billion of public expenditure, the allocation of £11.5 billion of grant, spread among just over 400 local authorities. I recognise that this is a tough settlement. As my right hon. and learned Friend the Member for Runcorn (Mr. Carlisle) said in a most impressive and valuable contribution, it involves a 3 per cent. reduction in the rate support grant. Even with the increased public expenditure allowance that we have made, it is still a tough public expenditure target for local authorities, and, of course, it involves a tight cash limit.
However, included within it are the targets, which we believe are fairly based, to encourage further progress in local government expenditure towards greater value for money, economy and efficiency, about which I shall say something shortly. As my right hon. Friend the Secretary of State said, against the background of the targets that we have set, it is highly significant how many local authorities are now hitting our targets.
Last year 279 out of 413 authorities were able to hit or almost to hit those targets. Those authorities were spread widely over all classes, whether metropolitan districts, London boroughs, or shire counties. They do not include metropolitan counties, but the other classes all made a contribution.
I do not think that the hon. Member for Blaydon (Mr. McWilliam) was listening to the speech of my right hon. Friend the Secretary of State. My right hon. Friend paid tribute to the many people in local authorities throughout the country who have tried to play their part in achieving our public expenditure targets. The hon. Gentleman called for my right hon. Friend to say something nice about those who were playing their part. My right hon. Friend has regularly paid tribute from the Dispatch Box to those authorities that are achieving their targets.
I should like to make clear to some of my hon. Friends who have been concerned about the matter that, of course, the targets are tough. Some have believed that inability to hit targets is an automatic indictment of an almost criminal offence. We have made it clear that the targets collectively represent the overall target that needs to be achieved if local government is to carry out its proudly repeated claim of matching national public expenditure figures.
We have set the highest spenders higher targets, but we have realistically taken into account the maximum reductions that they can make. Others may then have to make their contribution if the overall targets are to he achieved. But we have tried fairly to limit this within a reasonable range. That is why we have set the targets within the range of 1 per cent. to 7 per cent. The highest-spending authorities are on a 7 per cent. reduction, and the figure goes down to 1 per cent. and even in certain cases to a zero reduction where expenditure is significantly below the volume target and grant-related expenditure.
Having put forward our original proposals, we listened to the representations of the local authority associations and made a number of changes. We increased the public expenditure figures for local government by more than £1 billion. Nobody can say that that was not listening to representations from local government. Moreover, we have exempted from the holdback provisions those authorities which are below our GREs, once again, in response to representations. I hope that hon. Members will acknowledge that we have tried to respond to representations which we thought were valid.
I should like to say a quick word about GRE. The hon. Member for Woolwich, East (Mr. Cartwright) again ran that dangerous course for the SDP of coming perilously close to making a policy statement. He tiptoed round the course with great delicacy, but it appears that the old rate support grant system, with all its crudity, unfairness and across-the-board treatment, had certain attractions.
I have here the copy of the document that will be available in the Library and the Vote Office for every hon. Member to consider the GRE formula for this year, in the same way as we published it last year, showing its breakdown. That was not possible with the old multiple regression analysis. Only three people in my Department understood it—not one alone, but the three together in combination were able to give a full explanation. The document, together with the sheet available in each of their local authorities, sets out for hon. Members the GRE for each local authority—the categories and the allocation

made against each one. That is a much more comprehensible system for those hon. Members who wish to understand it.
I have often said that a document distributing £111/2 billion around 413 local authorities is not a child's mathematics paper. It is a complicated matter. We are making a genuine attempt to do it in a way that is open and available for discussion and debate. I invite hon. Members who are concerned about the GREs of their authorities to study the documents and to start discussions with us and with their local authorities now. It is not much good starting discussions in October or November, when the die is cast. This is the time when discussions will start on next year's rate support grant settlement. Because we have made the information available, we welcome people who wish to make their contributions.

Mr. Dan Jones: Will the right hon. Gentleman give way? I shall be only 10 seconds.

Mr. King: No, I am sorry; I have very little time.
We shall seek to continue to improve the workings of GRE. In one respect the introduction next year of the full details of the 1981 census will be of benefit, particularly to expanding counties where there have been problems. My hon. Friends who represent constituencies in Essex and Hertfordshire are concerned about these population figures, as are representatives of the expanding county of Buckinghamshire. The figures will be helpful to all these authorities.
Some hon. Members referred to rating reform, which is not a subject for this debate. We have published a Green Paper. My right hon. and learned Friend the Member for Runcorn, my hon. Friend the Member for Harwich (Sir J. Ridsdale) and my hon. Friend the Member for Ilford, South (Mr. Thorne) referred to the possibility of the transfer of some element of education expenditure to the national Exchequer. I see in an article in The Sunday Times that my right hon. Friend and I have undertaken
a task to make strong men cringe with horror: between them they are preparing to 'consult' every single Conservative MP, individually, about rating reform.
Neither my right hon. Friend nor I cringe with horror at that prospect. We are always delighted to speak to cur colleagues and to other hon. Members.

Mr. Dan Jones: Would the right hon. Gentleman speak to me now?

Mr. King: May I ask the hon. Gentleman to forgive me because I have very little time?
In regard to the moves we have made in the rate support grant this year, my right hon. and learned Friend the Member for Runcorn encouraged us to pay greater attention to GRE. He will recognise that in giving exemptions in GRE this year we have given, as it were, the supremacy of position to GRE even though we still have the volume element within the targets.
I agree very much with what my right hon. and learned Friend said about teachers' pay. Some hon. Members have criticised the cash limits in the rate support grant settlement. My right hon. and learned Friend drew attention to the fact that since 1979 teachers' pay has gone up by 58 per cent. On his estimate, it is not unreasonable to expect teachers to look on 4 per cent. as a not unacceptable provision. That is the provision that is included within the rate support grant of local government


as a whole. If some people get more, others are liable to have to make do with less. So I do not accept the overall 4 per cent. as an unreasonable provision.
My hon. and learned Friend the Member for Hemel Hempstead (Mr. Lyell), my hon. Friends the Members for Watford (Mr. Garel-Jones), for Southend, East (Mr. Taylor), for Harwich and for Basildon (Mr. Proctor) and the hon. Member for Harlow (Mr. Newens) referred to Hertfordshire and Essex. There are two issues in regard to which the problems are similar. I shall deal first with the case of the new towns. I know that the hon. Member for Harlow and others represent the concern about the GRE for new towns. We do not accept on the evidence that there is a case for changing the GREs, but we are prepared to have discussions to see whether there is some way in which in next year's settlement we can cover aspects of new towns which are not properly reflected. I have written to my hon. Friend the Member for Basildon about it, and I confirm my offer to have discussions.
My hon. and learned Friend the Member for Hemel Hempstead supported the overall need to control public expenditure but expressed concern about the situation in his county. We have welcomed the discussions which we have been able to have with him, with his hon. Friends and with the county council. I know that they are concerned to play their part in the overall need to reduce public expenditure. I understand that they have been hit by the cut in the grant percentage. That has affected all authorities, but it has a particular effect on high resource authorities such as Hertfordshire and Essex. In both cases I hope that all hon. Members will recognise that the majority of their district councils have done rather better. If we take the district councils into account, the grant share for Essex has changed from 2.82 per cent. to 2.81 per cent. That cannot be said to be a massive slaughter of the grant share.
The new census data will be helpful to authorities in high-growth areas. I know that Hertfordshire and Essex are concerned about the clawback that might be operated. I have better news for them, because there is every prospect that the clawback this year will be very small or even nonexistent.
My hon. Friend the Member for Basildon decided that he would register a protest about the appointment of my hon. Friend the Under-Secretary of State for the Environment to have special responsibility within the Department for ethnic minorities, with which my Department is already involved. I could not disagree with his comments more. It is a part of our responsibilities that we intend to discharge to our full capacity. My hon. Friend the Member for Basildon may object to my hon. Friend saying that he has an open door to members of ethnic minorities, but he should know that that is not discrimination. It has been the policy of my right hon. Friend the Secretary of State and all Ministers to keep as open a door as possible to everyone. Since part of that open door policy included opening it to representatives of the hon. Gentleman's county council, who visited us at their request, I hope that he will support an open door policy in all areas.
We have tried to put before the House a rate support grant settlement that we believe is fair and that, while being tough, recognises the reality of the present economic position. We have had many comments from members of

the Labour Party about the way in which they would approach local government. There have also been criticisms of the Government. There seems to be a muddle. I have had the pleasure of reading the press release from the Leader of the Opposition, which is not entirely in line with some of the policies put forward by the right hon. Member for Ardwick. The Leader of the Opposition stated the need to achieve greater independence for local government. The hon. Member for Bedwellty (Mr. Kinnock), who is now the Opposition's education spokesman, is launching proposals to remove control of education expenditure from local authorities. He insists that the present system is not working and that centralisation is the only answer. That may come as a shock to the hon. Member for Greenwich (Mr. Barnett), who took great exception to what my right hon. Friend the Secretary of State said about that.
It seems to have been an unhappy conference for the Labour Party. It was not chaired by the hon. Member for Crewe (Mrs. Dunwoody), who was unkindly described in The Guardian Diary last Friday as "John Golding in Drag". There is an extraordinary story about the wing of the party to which the right hon. Member for Ardwick is attached which was described as the
For God's sake stop talking about socialism—there's an election coming
wing. Apparently that wing of the party, which includes people such as the right hon. Member for Leeds, East (Mr. Healey), the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley) and the right hon. Member for Ardwick has been jumping up and down on the right hon. Lady the Member for Lanark (Dame Judith Hart). That sounds like an extremely painful performance, but apparently they did so because she was threatening not to chair the Labour Party's local government conference. There was then a risk that it would be chaired by the hon. Member for Sheffield, Brightside (Miss Maynard). Not only did it involve the right hon. Member for Sparkbrook, but his mum Enid, the lord mayor of Sheffield, who might have walked out. [HON. MEMBERS: "Answer the debate."]
The
For God's sake stop talking about socialism, there's an election coming
wing of the party has now been joined by the leader of Lambeth council. Hon. Members will have noticed that there is no more talk about increased expenditure in Lambeth or of tree sculptors and poets on the rates. There is rather talk of tough cash limits, because there is a fear of facing the electorate. No longer are Labour local authorities trying to ignore the ratepayers. In a desperate attempt to curry electoral favour, they are seeking to claim that they are the real protectors of the ratepayers.
As my hon. Friend the Member for Ealing, North (Mr. Greenway) said, there has been a 90 per cent. increase in the GLC rate, a 35 per cent. increase in Avon, a 52 per cent. increase in Nottinghamshire, a 61 per cent. increase in Humberside, and a 66 per cent. increase in West Yorkshire. That does not give Labour councils credentials for claiming to be the friends of the ratepayers.
It is against that background that the Government are seeking to protect employment and to fight for industry in these areas. In the knowledge of the damage that Labour councils are doing, we have sought to preserve a sensible approach to local government expenditure, to give authorities, where they so wish, the opportunity to apply low rates, and to ensure that where authorities are prepared


to pursue economic policies it is possible for them to levy low rates. I am delighted by the efforts of a considerable number of authorities this year. I only wish that a number of Labour authorities would follow that example.
It is against that background that the Government put the rate support grant before the House. I commend the settlement.

Resolved,

That the Rate Support Grant (Increase) Order 1982, a copy of which was laid before this House on 28th January, be approved.
That the Rate Support Grant Supplementary Report (England) 1982, a copy of which was laid before this House on 28th January, be approved.

Question put,

That the Rate Support Grant Report (England) 1982/83, a copy of which was laid before this House on 5th February, be approved.

The House divided: Ayes 306, Noes 252.

Division No. 68]
[10.02 pm


AYES


Adley, Robert
Cope, John


Alexander, Richard
Cormack, Patrick


Alison, RtHon Michael
Corrie, John


Amery, RtHon Julian
Costain, SirAlbert


Ancram, Michael
Cranborne, Viscount


Arnold, Tom
Critchley, Julian


Aspinwall, Jack
Crouch, David


Atkins, RtHon H. (S'thorne)
Dean, Paul (NorthSomerset)


Atkins, Robert (PrestonN)
Dickens, Geoffrey


Atkinson, David (B'm'th.E)
Dorrell, Stephen


Baker, Kenneth(St.M'bone)
Douglas-Hamilton, LordJ.


Baker, Nicholas (N Dorset)
Dover, Denshore


Bell, SirRonald
du Cann, Rt Hon Edward


Bendall, Vivian
Dunn, Robert (Dartford)


Benyon, Thomas (A 'don)
Durant, Tony


Benyon, W. (Buckingham)
Dykes, Hugh


Best, Keith
Eden, Rt Hon Sir John


Bevan, David Gilroy
Edwards, RtHon N. (P'broke)


Biffen, RtHon John
Eggar, Tim


Biggs-Davison, SirJohn
Elliott, SirWilliam


Blackburn, John
Emery, Sir Peter


Blaker, Peter
Eyre, Reginald


Body, Richard
Fairbairn, Nicholas


Bonsor, SirNicholas
Fairgrieve, SirRussell


Boscawen, Hon Robert
Faith, MrsSheila


Bottomley, Peter (W'wich W)
Farr, John


Bowden, Andrew
Fell, SirAnthony


Boyson, Dr Rhodes
Fenner, Mrs Peggy


Braine, SirBemard
Finsberg, Geoffrey


Bright, Graham
Fisher, SirNigel


Brinton, Tim
Fletcher, A. (Ed'nb'ghN)


Brittan, Rt. Hon. Leon
Fletcher-Cooke, SirCharles


Brooke, Hon Peter
Fookes, MissJanet


Brotherton, Michael
Forman, Nigel


Brown, Michael (Brigg&amp;Sc'n)
Fowler, Rt Hon Norman


Browne, John (Winchester)
Fox, Marcus


Bruce-Gardyne, John
Fraser, Peter (South Angus)


Bryan, Sir Paul
Fry, Peter


Buck, Antony
Gardiner, George(Reigate)


Budgen, Nick
Gardner, Edward (SFylde)


Bulmer, Esmond
Garel-Jones, Tristan


Burden, SirFrederick
Gilmour, RtHonSirlan


Butcher, John
Glyn, DrAlan


Cadbury, Jocelyn
Goodhart, SirPhilip


Carlisle, Kenneth(Lincoin)
Goodlad, Alastair


Carlisle, RtHon M. (R'c'n)
Gorst, John


Chalker, Mrs. Lynda
Gow, Ian


Channon, Rt. Hon. Paul
Grant, Anthony (HarrowC)


Chapman, Sydney
Gray, Hamish


Churchill, W.S.
Greenway, Harry


Clark, Hon A. (Plym'th, S'n)
Grieve, Percy


Clark, Sir W.(CroydonS)
Griffiths, E. (B'ySf. Edm'ds)


Clarke, Kenneth (Rushcliffe)
Griffiths, Peter Portsm'thN)


Clegg, Sir Walter
Grist, Ian


Cockeram, Eric
Grylls, Michael


Colvin, Michael
Gummer, JohnSelwyn





Hamilton, Hon A.
Moore, John


Hamilton, Michael (Salisbury)
Morgan, Geraint


Hampson, Dr Keith
Morris, M. (N'hamptonS)


Hannam, John
Morrison, Hon C. (Devizes)


Hastings, Stephen
Mudd, David


Havers, Rt Hon Sir Michael
Murphy, Christopher


Hawkins, Paul
Myles, David


Hawksley, Warren
Neale, Gerrard


Hayhoe, Barney
Needham, Richard


Heath, Rt Hon Edward
Nelson, Anthony


Heddle, john
Neubert, Michael


Henderson, Barry
Newton, Tony


Heseltine, Rt Hon Michael
Normanton, Tom


Hicks, Robert
Nott, Rt Hon John


Higgins, Rt Hon Terence L.
Onslow, Cranley


Hill, James
Oppenheim, Rt Hon Mrs S.


Hogg, HonDouglas (Gr'th'm)
Osborn, John


Holland, Philip (Carlton)
Page, John (Harrow, West)


Hooson, Tom
Page, Richard (SW Herts)


Hordern, Peter
Parkinson, Rt Hon Cecil


Howe, Rt Hon Sir Geoffrey
Parris, Matthew


Howell, Rt Hon D. (G'ldf'd)
Patten, Christopher (Bath)


Howell, Ralph (NNorfolk)
Pattie, Geoffrey


Hunt, David (Wirral)
Pawsey, James


Hunt, John (Ravensbourne)
Percival, Sirlan


Hurd, Rt Hon Douglas
Peyton, Rt Hon John


Irving, Charles (Cheltenham)
Pink, R. Bonner


Jenkin, Rt Hon Patrick
Pollock, Alexander


JohnsonSmith, Geoffrey
Porter, Barry


Jopling, Rt Hon Michael
Prentice, Rt Hon Reg


Joseph, Rt Hon Sir Keith
Price, Sir David (Eastleigh)


Kaberry, Sir Donald
Prior, Rt Hon James


Kellett-Bowman, MrsElaine
Pym, RtHon Francis


Kershaw, Sir Anthony
Raison, Rt Hon Timothy


Kimball, Sir Marcus
Rathbone, Tim


King, Rt Hon Tom
Rees-Davies, W. R.


Kitson, Sir Timothy
Renton, Tim


Knight, MrsJill
Rhodes James, Robert


Knox, David
Ridley, HonNicholas


Lamont, Norman
Ridsdale, SirJulian


Lang, Ian
Rifkind, Malcolm


Langford-Holt, SirJohn
Rippon, RtHonGeoffrey


Latham, Michael
Roberts, M. (Cardiff NW)


Lawrence, Ivan
Roberts, Wyn (Conway)


Lawson, Rt Hon Nigel
Rossi, Hugh


Lee, John
Rost, Peter


LeMarchant, Spencer
Sainsbury, HonTimothy


Lennox-Boyd, HonMark
St. John-Stevas, Rt Hon N.


Lester, Jim (Beeston)
Shaw, Giles (Pudsey)


Lewis, Kenneth (Rutland)
Shaw, Michael (Scarborough)


Lloyd, Ian (Havant &amp; W'loo)
Shelton, Willam (Streatham)


Lloyd, Peter (Fareham)
Shepherd, Colin (Hereford)


Loveridge, John
Shepherd, Richard


Luce, Richard
Shersby, Michael


Lyell, Nicholas
Silvester, Fred


Macfarlane, Neil
Sims, Roger


MacGregor, John
Skeet, T. H. H.


MacKay, John (Argyll)
Smith, Dudley


Macmillan, RtHon M.
Speed, Keith


McNair-Wilson, M. (N'bury)
Speller, Tony


McNair-Wilson, P. (New F'st)
Spence, John


McQuarrie, Albert
Spicer, Jim (WestDorset)


Major, John
Spicer, Michael (S Worcs)


Marland, Paul
Sproat, lain


Marlow, Antony
Squire, Robin


Marshall, Michae (Arundel)
Stainton, Keith


Mates, Michael
Stanbrook, lvor


Maude, RtHon Sir Angus
Stanley, John


Mawby, Ray
Steen, Anthony


Mawhinney, DrBrian
Stevens, Martin


Maxwell-Hyslop, Robin
Stewart, A. (ERenfrewshire)


Mayhew, Patrick
Stewart, Ian (Hitchin)


Meyer, SirAnthony
Stokes, John


Miller, Hal (B' grove)
Stradling Thomas, J.


Mills, lain (Meriden)
Tapsell, Peter


Mills, Peter (WestDevon)
Taylor, Teddy (S 'end E)


Mitchell, David (Basingstoke)
Tebbit, Rt Hon Norman


Moate, Roger
Temple-Morris, Peter


Monro, SirHector
Thatcher, Rt Hon Mrs M.


Montgomery, Fergus
Thomas, Rt Hon Peter






Thompson, Donald
Warren, Kenneth


Thorne, Neil (Ilford South)
Watson, John


Thornton, Malcolm
Wells, Bowen


Townend, John (Bridlington)
Wells, John (Maidstone)


Townsend, Cyril D, (B'heath)
Wheeler, John


Trippier, David
Whitelaw, Rt Hon William


Trotter, Neville
Whitney, Raymond


van Straubenzee, Sir W.
Wickenden, Keith


Vaughan, DrGerard
Wiggin, Jerry


Viggers, Peter
Wilkinson, John


Waddington, David
Williams, D.(Montgomery)


Wakeham, John
Winterton, Nicholas


Waldegrave, Hon William
Wolfson, Mark


Walker, B.(Perth)
Young, Sir George (Acton)


Walker-Smith, Rt Hon Sir D.
Younger, Rt Hon George


Wall, Sir Patrick



Waller, Gary
Tellers for the Ayes:


Walters, Dennis
Mr. Anthony Berry and


Ward, John
Mr. Carol Mather.




NOES


Abse, Leo
Dean, Joseph (Leeds West)


Allaun, Frank
Dewar, Donald


Alton, David
Dixon, Donald


Anderson, Donald
Dobson, Frank


Archer, Rt Hon Peter
Dormand, Jack


Ashley, Rt Hon Jack
Douglas, Dick


Ashton, Joe
Douglas-Mann, Bruce


Atkinson, N.(H'gey,)
Dubs, Alfred


Bagier, Gordon A.T.
Duffy, A.E.P.


Barnett, Guy (Greenwich)
Dunn, James A.


Barnett, Rt Hon Joel (H'wd)
Dunnett, Jack


Beith, A.J.
Dunwoody, Hon Mrs G.


Bennett, Andrew (St'kp'tN)
Eadie, Alex


Bidwell, Sydney
Eastham, Ken


Booth, RtHonAlbert
Edwards, R.(W'hampt'n S E)


Boothroyd, MissBetty
Ellis, R.(NE D'bysh're)


Bottomley, RtHonA. (M'b'ro)
Ellis, Tom (Wrexham)


Bray, Dr Jeremy
English, Michael


Brown, Hugh D. (Provan)
Ennals, Rt Hon David


Brown, R. C. (N'castle W)
Evans, loan (Aberdare)


Brown, Ronald W. (H'ckn'yS)
Evans, John (Newton)


Brown, Ron (E'burgh, Leith)
Ewing, Harry


Buchan, Norman
Field, Frank


Callaghan, Rt Hon J.
Fitch, Alan


Callaghan, Jim (Midd't'n &amp; p)
Flannery, Martin


Campbell, Ian
Fletcher, Ted (Darlington)


Campbell-Savours, Dale
Foot, Rt Hon Michael


Canavan, Dennis
Ford, Ben


Cant, R. B.
Forrester, John


Carmichael, Neil
Foster, Derek


Carter-Jones, Lewis
Foulkes, George


Cartwright, John
Fraser, J.(Lamb'th.N'w'd)


Clark, Dr David (S Shields)
Freeson, Rt Hon Reginald


Cocks, Rt Hon M. (B'stolS)
Garrett, John (NorwichS)


Cohen, Stanley
Garrett, W. E. (Wallsend)


Coleman, Donald
George, Bruce


Concannon, RtHon J. D.
Gilbert, Rt Hon Dr John


Conlan, Bernard
Ginsburg, David


Cook, Robin F.
Golding, John


Cowans, Harry
Graham, Ted


Craigen, J.M.(G'gow.M'hill)
Grant, George(Morpeth)


Crawshaw, Richard
Grant, John (IslingtonC)


Crowther, Stan
Grimond, Rt Hon J.


Cryer, Bob
Hamilton, James (Bothwell)


Cunliffe, Lawrence
Hamilton, W.W.(C'tral Fife)


Cunningham, G. (IslingtonS)
Hardy, Peter


Cunningham, Dr J. (W'h'n)
Harrison, Rt Hon Walter


Dalyell, Tam
Hattersley, Rt Hon Roy


Davidson, Arthur
Healey, Rt Hon Denis


Davies, Rt Hon Denzil (L'lli)
Heffer, Eric S.


Davies, Ifor (Gower)
Hogg, N. (EDunb't'nshire)


Davis, Clinton (HackneyC)
Holland, S. (L'b'th, Vaux'll)


Davis, Terry (B'ham, Stechf'd)
HomeRobertson, John


Deakins, Eric
Homewood, William


Question accordingly agreed to.





Hooley, Frank
Pavitt, Laurie


Horam, John
Pendry, Tom


Howell, Rt Hon D.
Penhaligon, David


Howells, Geraint
Powell, Raymond (Ogmore)


Hoyle, Douglas
Prescott, John


Huckfield, Les
Price, C. (Lewisham W)


Hughes, Mark. (Durham)
Proctor, K. Harvey


Hughes, Robert (Aberdeen N)
Race, Reg


Hughes, Roy (Newport)
Radice, Giles


Janner, Hon Greville
Rees, Rt Hon M (Leeds S)


Jay, Rt Hon Douglas
Roberts, Albert (Normanton)


John, Brynmor
Roberts, Allan (Bootle)


Johnson, James (Hull West)
Roberts, Ernest (Hackney N)


Johnson, Walter (Derby S)
Roberts, Gwilym (Cannock)


Jones, Rt Hon Alec (Rh'dda)
Robinson, G. (Coventry NW)


Jones, Barry (East Flint)
Rodgers, Rt Hon William


Jones, Dan (Burnley)
Rooker, J.W.


Kaufman, Rt Hon Gerald
Roper, John


Kerr, Russell
Ross, Ernest (Dundee West)


Kilfedder, James A.
Ross, Stephen (Isle of Wight)


Kilroy-Silk, Robert
Rowlands, Ted


Kinnock, Neil
Ryman, John


Lambie, David
Sandelson, Neville


Lamborn, Harry
Sever, John


Lamond, James
Sheerman, Barry


Leadbitter, Ted
Sheldon, Rt Hon R.


Leighton, Ronald
Shore, Rt Hon Peter


Lestor, Miss Joan
Silkin, Rt Hon J. (Deptford)


Lewis, Arthur (N'ham NW)
Silkin, Rt Hon S. C. (Dulwich)


Lewis, Ron (Carlisle)
Silverman, Julius


Litherland, Robert
Skinner, Dennis


Lofthouse, Geoffrey
Snape, Peter


Lyon, Alexander (York)
Spearing, Nigel


Lyons, Edward (Bradf'd W)
Spriggs, Leslie


Mabon, Rt Hon Dr J. Dickson
Stallard, A.W.


McCartney, Hugh
Steel, Rt Hon David


McDonald, DrOonagh
Stoddart, David


McElhone, Frank
Stott, Roger


McGuire, Michael (Ince)
Straw, Jack


McKay, Allen (Penistone)
Summerskill, HonDrShirley


McKelvey, William
Taylor, Mrs Ann (Bolton W)


MacKenzie, Rt Hon Gregor
Thomas, Dafydd (Merioneth)


McNally, Thomas
Thomas, DrR. (Carmarthen)


McNamara, Kevin
Thorne, Stan (Preston South)


McTaggart, Robert
Tilley, John


McWilliam, John
Torney, Tom


Marshall, D (G'gowS'ton)
Urwin, Rt Hon Tom


Marshall, DrEdmund (Goole)
Varley, Rt Hon Eric G.


Marshall, Jim (Leicester S)
Wainwright, E. (DearneV)


Marlin, M (G'gowS'burn)
Wainwright, R. (ColneV)


Mason, Rt Hon Roy
Walker, Rt Hon H. (D'caster)


Maxton, John
Watkins, David


Maynard, Miss Joan
Weetch, Ken


Meacher, Michael
Wellbeloved, James


Mellish, Rt Hon Robert
Welsh, Michael


Mikardo, lan
White, Frank R.


Millan, Rt Hon Bruce
White, J. (G'gowPollok)


Miller, Dr M.S.(E Kilbride)
Whitehead, Phillip


Mitchell, Austin (Grimsby)
Whitlock, William


Mitchell, R.C. (Soton ltchen)
Wigley, Dafydd


Morris, Rt Hon A. (W'shawe)
Willey, Rt Hon Frederick


Morris, Rt Hon C. (O'shaw)
Williams, Rt Hon A. (S'sea W)


Morris, Rt Hon J. (Aberavon)
Williams, Rt Hon Mrs (Crosby)


Morton, George
Wilson, Rt Hon Sir H. (H'ton)


Moyle, Rt Hon Roland
Wilson, William (C'try SE)


Newens, Stanley
Winnick, David


Oakes, Rt Hon Gordon
Woodall, Alec


O'Neill, Martin
Woolmer, Kenneth


Orme, Rt Hon Stanley
Wright, Sheila


Owen, Rt Hon Dr David
Young, David (Bolton E)


Palmer, Arthur



Park, George
Tellers for the Noes:


Parker, John
Mr. James Tinn and


Parry, Robert
Mr. Frank Haynes.

Rate Support Grant (Wales)

The Secretary of State for Wales (Mr. Nicholas Edwards): I beg to move, 
That the Welsh Rate Support Grant Report 1982, a copy of which was laid before this House on 28th January, be approved.

Mr. Deputy Speaker (Mr. Bernard Weatherill): With this, it will be convenient to take the second motion:
That the Welsh Rate Support Grant Supplementary Report 1982, a copy of which was laid before this House on 28th January, be approved.

Mr. Edwards: I shall deal with the reports in turn and it may be convenient for the House if I deal fairly quickly with the supplementary report before going on to the main report for the 1982–83 settlement.
The supplementary report is primarily a mechanism for adjusting the rate support grants for the present financial year to take account of certain costs and factors which were uncertain or unknown when the main report was made. The supplementary report therefore takes account of the latest information on rates of interest for loan charges and subsidies within the housing revenue account and the addition to relevant expenditure to take account of the additional costs of the September 1981 police pay awards. The supplementary report also "close ends" the grant—that is, it ensures that the grant payments to individual authorities in aggregate equals the total amount of grant available. The necessary adjustments to grant entitlements have been made by a method agreed with the Welsh Consultative Council on Local Government Finance. The report also takes account of more up-to-date factual information affecting grant entitlements; for example it uses rateable values as at the mid-point of the grant year and data changes arising from local authority area boundary changes made in the year under the provisions of the Local Government Act 1972.
This supplementary report can be regarded therefore as essentially a tidying-up process. Its most significant aspect probably is that it reflects my decision not to reduce the total amount available for local authority grants in the current financial year. Here the position differs from that in England. Although authorities' budgets suggested that the current expenditure would exceed the overall expenditure target, I accepted the Welsh local authority associations' view that that excess was likely to be eliminated by various means, including the normal process of budget drift during the year. In taking that decision, I placed my trust in the local authorities. However, I have made it clear to the local authorities that I will have to look at this decision again when I have firmer information about actual expenditure in the current financial year. If an excess remains I may have to reduce the grant by means of a further supplementary report. At this stage, I must reserve my judgment.
I turn to the main Welsh rate support grant for the next financial year. The report gives effect to my decisions and determinations in respect of local authority grants for next year. Before dealing with the report itself, I would like to set out briefly the background against which my decisions have had to be taken.
The year 1981–82 was, of course, the first year of the separate Welsh rate support grant system. As I said in last year's rate support grant debate, the settlement is a matter of major importance, not simply to the local authorities

concerned but to the Government and the country as a whole. That statement is as relevant today as it was then. Public expenditure has to be kept at a level that the nation can afford. Local authority expenditure accounts far a substantial proportion of total public expenditure and it cannot be exempt from that fundamental requirement.
Within that inevitable and necessary constraint the Government's main objectives have been to recognise the relatively good performance of Welsh authorities in seeking to meet our aggregate expenditure target and to do everything possible to help industry and commerce. Clearly, it makes no sense to set expenditure level reductions that are unattainable. In arriving at our decision on the appropriate level of expenditure we have taken fully into account the need for realism. We have set authorities an aggregate expenditure target that they can achieve.
There has been a recognition in local government circles that, though there may be differences on certain matters, the settlement overall is fair and indeed generous. I have increased the relevant local authority current expenditure to £1, 126 million, an increase of £94 million or about 9.1 per cent. over last year's settlement figures. Total relevant expenditure on which grant is paid and which reflects the additional provision for loan and other capital charges arising from the substantially increased capital allocations I have been able to make is increased from £1, 187 million to £1, 300 million.
The aggregate Exchequer grant is at a level of support of 72.5 per cent. of relevant expenditure and amounts to £943 million, an increase of £72 million over the 1981–82 total or about 8.3 per cent. Of this total, specific grants total £96.62 million, transport supplementary grant—capital only—£30 million and the national parks supplementary grant £1.69 million. That leaves for the rate support grants themselves—that is the domestic rate relief grant and the block grant for local authorities—£814.69 million.
As I have said, this is a fair, indeed generous, settlement. The level of current expenditure provision is such that it implies for Welsh local authorities as a whole virtually the same level of services as envisaged in the 1981–82 settlement. If, of course, pay and price increases exceed the levels allowed for in the settlement, authorities will be expected to make compensating savings within their budgets. That discipline applies to local authorities as it does to the Government.
Local authorities must realise that they have a choice of options in that situation. Some are making statements—and are determining rate levels—on the assumption that any excess should simply be loaded on ratepayers. That is not so. They have a choice of cutting costs and manning levels, of reducing services or of putting up charges. It is wrong for them to argue that there is no room for further improvement in efficiency Every ratepayer will know that that is rubbish.
The marginal percentage reduction in grant of 0.9 per cent. is considerably less than the percentage reductions in England and Scotland. The relevant expenditure to which it applies has been substantially increased, so that the volume of central Government support is higher than a year ago and some £7 million more than would have been the result if we had applied last year's grant percentage of 73.4 per cent. to the planned expenditure figure in last year's White Paper. Some local authority spokesmen refer only to the percentage figure without any reference to relevant expenditure. The two have to be looked at


together. The Welsh authorities are in a much less difficult position than their English colleagues. They look like coming close to achieving the overall expenditure level that I set last year so that they do not have to make up lost ground, and they actually start with more Government grant for this year than they might reasonably have expected a year ago.
Before leaving the question of grant, it is useful to put the totality of grant into perspective. Last year, out of the total amount of grant available for England and Wales as a whole, the Welsh share was a little above the average share of grant for the period 1975–76 to 1980–81. This year, following a review of the procedures for allocating grant to Wales and to England, that share has been increased again, and is some £43 million higher than it would have been had the historic share applied. I think that that factor alone, if nothing else, is more than adequate justification for a separate Welsh rate support grant system.

Sir Anthony Meyer: Before my right hon. Friend leaves this aspect of the matter, can he assure me that in assessing the rate support grant he has taken full account of the special needs of areas such as the county of Clwyd? Because of decisions taken not by market forces but by governmental agencies such as the British Steel Corporation, Clwyd has found itself suddenly confronted with about 10, 000 additional unemployed people at extremely short notice. It has, therefore, special requirements in the need to attract new industry. Can my right hon. Friend give an assurance that that has been taken fully into account in assessing the rate support grant?

Mr. Edwards: Those factors have been discussed in great detail with local authority associations and the consultative council. Some aspects of the GRE formula have been revised and somewhat greater account has been taken of unemployment than was the case in the last settlement. As I told the House yesterday, in allocating capital, particularly for the urban programme, I have paid particular attention to the need to help new industry and the social problems that arise in areas of high unemployment. I think that I can, therefore, give my hon. Friend the assurance that he seeks.
As I have also stated elsewhere, I have shown that we can now insulate Welsh authorities from events taking place in England and decisions of English authorities. This is another advantage of a separate Welsh rate support grant system. We can treat them on the basis of their own performance and not tar them with the brush of Mr. Livingstone or anyone else.
I was anxious in my settlement to recognise the Welsh authorities' relatively good performance in a way that would help industry and construction and therefore employment. I have done this in two ways. First, the Government have significantly increased the provision for local authority capital expenditure next year. Including the urban programme that I have just mentioned to my hon. Friend, we are allocating £279 million for capital expenditure, which is an increase of £46 million or about 20 per cent. above the amounts allocated in 1981–82. The increase includes an additional provision for local authority roads, housing and the urban programme. Although this is not directly part of the rate support grant settlement, the increase in capital expenditure reflects the

Government's view of local authorities' overall spending performance. I think that this demonstrates as clearly as anything that there is a trade-off between capital and current expenditure. If current expenditure is constrained, it enables resources to be made available for worthwhile capital projects—something that we all want to see.

Mr. Dafydd Wigley: I listened to the Secretary of State's remarks about the capital allocations to local authorities during yesterday's Question Time. In view of his remarks now, how does he explain that for the county of Gwynedd the capital allocation is down 5 per cent. in cash terms, which is presumably equivalent to 15 per cent. or more in real terms? That has decreased the allocation to £6.5 million, which means being unable to proceed with vital road projects.

Mr. Edwards: The allocation of those projects is not done on some formula basis of distribution but on particular projects, which are geared to essential infrastructure to attract jobs. We must make decisions on those. They must also be fitted into the context of other major infrastructure improvements occurring in North Wales. For example, Clwyd made the same complaint but also issued some publicity material drawing attention to the excellent road links created there.
That emphasises the importance of local authorities coming forward with specific relevant proposals directly related to this sort of requirement. The matter has been dealt with in that way and not on a formula basis related to individual authorities. Some authorities will not do as well as others because particular projects seem important to us now and we have given them the go-ahead.
I yesterday announced the details of the urban programme, which supports many very worthwhile projects all over Wales to which local government attributes great importance. The total of £15.3 million is 47 per cent. higher than the amount allocated last year and more than double the programme in 1979–80.
Second, I reduced the level of domestic rate relief from its present 36p to 18.5p—the same level as in England. This means that industry and commerce will pay a little less of the total rates call in Wales and domestic consumers a little more. As hon. Members will know, the rate support grants proper comprise two elements; the domestic rate relief grant, which is a direct subsidy to domestic ratepayers, and the block grant itself which is paid to local authorities in respect of their expenditure on the services that they provide. Last year, I kept the level of domestic rate relief grant at 36p in the pound because I did not think it appropriate to reduce this level in the first year of operation of the new and separate block grant rate support system in Wales. However, hon. Members should understand that the differential between the levels of domestic rate relief in England and Wales—amounting to 17.5p in the pound—has become increasingly hard to defend. Whatever the justification for this differential in the past—of course I acknowledge that it has been of help to domestic consumers—I simply do not believe that it can be justified in the present circumstances. One has only to compare domestic rate bills.
In 1981–82 the average unrebated domestic rate bill in Wales was £153 compared with an average unrebated bill of £239 in England. Even allowing for factors such as lower rateable values in Wales, or income levels, there is


no justification for maintaining this discrepancy at the expense—that is what it means—of industry and commerce.

Mr. Donald Anderson: Does the right hon. Gentleman accept the historic link between this higher domestic rate relief and higher water rates in Wales? Given the figures we just heard about higher water rates from the Wales water authority, can he now say that it is time to reduce by half the domestic rate relief?

Mr. Edwards: I shall say two things. First, even if one adds on the water charges on the revised basis, it is still true that the totality will be a good deal less than in England. Secondly, I can repeat the values given by the right hon. Member for Rhondda (Mr. Jones) on 16 March 1977., when speaking on this subject in the debate on the Water Equalisation Bill 1977.
He said:
In the settlements for 1976–77 and for 1977–78 there is no question of water charges being taken into account by the Government in their decisions about the levels of domestic relief. Those decisions that were taken for the years 1976–77 and 1977–78 were based solely on the likely effects of changes in the levels of relief on local authority domestic rate poundages and had no relevance whatsoever to the level of water charges in Wales or in any other part of the United Kingdom. They had no connection with them.
The right hon. Gentleman continued:
However much one sought to alter the level of rate support grant, it would not affect the level of water charges.
He added:
I assure him that the water charges are not taken into account and were not a factor in deciding the level of the domestic element." [Official Report, 16 March 1977; Vol. 928, c. 568.] That has been the position under successive Governments for a number of years and it was spelt out by the right hon. Member for Rhondda.
As I was saying, this is not the time to maintain such a discrepancy at the expense of industry and commerce. The favourable settlement provided the opportunity to reduce domestic rate relief without unduly penalising domestic ratepayers. I recognise of course that this reduction in domestic rate relief will mean that domestic ratepayers will have to pay more than would otherwise be the case. But the amount involved is not the 17½p reduction in the rate but, on average, about 9p. This is because the amount of money "saved"—about £23 million—has not been taken away from the rate support grant's total but has been added to the block grant going to authorities. This of course has the effect of reducing the general rate poundage which benefits both industrial and domestic ratepayers so that domestic ratepayers will have to find only about half of the absolute reduction.
I make no apologies for the change. No one likes to see domestic rates increased, but we must balance the increase against the substantial help that this change will give to industry and commerce and, of course, to employment. Just as I was concerned to see capital expenditure increased so, for the same reasons, I want to give the maximum help that I can to industry and commerce in the Principality and thus help them in their efforts to overcome the recession.
At the end of the day rating decisions depend entirely upon the decisions taken by the local authorities themselves—I have no control over those decisions. However, I am sure—at least I hope I am sure—that all authorities in Wales will be as anxious as I am to see that the maximum benefit accrues to industry and commerce

from this move. I look to them to keep their general rate poundage down to the lowest possible level, which, of course, will benefit all ratepayers.
I want to avoid too many technical details, but I trust refer to the block grant mechanisms. They remain virtually as last year, the only changes being those to the power of the curve above the threshold and to safety nets. I shall try to explain. As regards the former, I have increased the power of the mysterious thing called the curve from 1.35 to 1.45 so that authorities spending substantially in excess of GRE will suffer a slightly greater percentage reduction in grant on such expenditure compared to last year—in other words, the ratepayers will have to fund slightly more of very high levels of expenditure compared to GRE. As for safety nets, for this year I have decided that I will have only a single stage 5p safety net at the ratepayer level, with 4p going to the counties and 1p to the districts. In other words, there will be a 5p maximum change at the ratepayer level. But the safety nets will protect only against changes to GREs and the residual effects from moving to the new block grant system and not from authorities' expenditure decisions.

Mr. Tom Hooson: I shall be grateful if my right hon. Friend will comment on a factor that is of considerable importance to the rural areas of Wales, and that is the evaluation of the sparsity factor. Is he satisfied with the situation when there has been no progress in making allowance for the problems of rural areas in the first year during which the formula has been under the control of the Welsh Office?

Mr. Edwards: This matter has been discussed in great detail in the consultative council in an attempt to obtain the fairest possible treatment for all areas, including the rural areas. The present formula was agreed with the local authority associations. In so far as changes are produced, there will be safety nets to protect individual local authorities. I have always undertaken, as my hon. Friend is aware, to examine this matter to see whether improvements can be taken into account. My hon. Friend can rest assured that sparsity and other factors have been taken into account in the settlement.
Before concluding, I should like to say a few words more about expenditure. I have already referred to the fact that, unlike what has happened in England, I have decided not to withhold grant this year because of the potential current expenditure excess.
Similarly, unlike the position in England, I have not set individual authority expenditure targets. I would like to make it perfectly clear and repeat what I have said on other occasions. I do not want to be driven down the road of setting individual authority expenditure targets. No matter how carefully these are constructed, a degree of imprecision is inevitably involved, which can be unfair for individual authorities. As local authorities know, my concern is the aggregate expenditure target and I and they accept that, if that is achieved, some authorities with similar characteristics may be spending at different rates.
I am, of course, determined to see that my overall expenditure target is met. As I have explained, the settlement provision for next year should enable broadly the same level of service to be provided by authorities as in the current year. This means authorities in aggregate will have to constrain their cash expenditure within my target. Again, as I have already remarked, if pay


settlements and prices move differently from the Government's assumptions used in the settlement, local authorities will have to absorb these increases by increasing efficiency, reducing manpower, cutting services or some combination of these methods. The alternative would be to push up rates and require all ratepayers—both domestic and non-domestic—to bear the brunt of a level of expenditure not justified in our present economic circumstances. If this happens and expenditure exceeds my target, I will have no alternative but to withhold grant.
I must say to local authorities that some of the early decisions on budgets that I have heard of do cause me to fear that they are relaxing their efforts to reduce costs. If some authorities push the total of local government expenditure over the target then others, which have made efforts, may find themselves suffering in the inevitable cutback. I might be forced to introduce individual targets to protect authorities that have made an effort to reduce expenditure.
There should be no misunderstanding. If there is an overspend next year and, indeed, if the current expenditure overspend this year is not substantially reduced from the present level, I shall have to withhold grant.

Mr. D. E. Thomas: The right hon. Gentleman says that he does not operate expenditure controls for particular authorities. Within the document there is published the grant-related expenditure overall for each authority. The right hon. Gentleman also publishes the GRE unit for each factor. Yet the same document states that the figures
do not form a basis for calculating a notional allocation of either grant-related expenditure or grant to individual authorities for any particular service.
Why does he not publish such information? It would be useful to hon. Members in examining the performance of authorities and would also be useful to his Department.

Mr. Edwards: One reason is that I do not wish to dictate to local authorities their own priority decisions and their own choices. The local authorities themselves. I believe, would be unhappy to go down the road that the hon. Gentleman suggests. As he has put the suggestion, I shall consider it and perhaps return to it if I am able to reply to the debate.
By any standard of comparison—by comparison with previous settlements, by comparison with the English and Scottish settlements—and on the simple basis of what it will enable Welsh authorities to do next year this is a fair and reasonable settlement.
However, I am shocked by reports that in Cardiff rates for industry may go up by 14 per cent. and domestic rates may go up by 42 per cent. In the Vale of Glamorgan a general rate increase of 18 per cent. has been proposed with an increase in domestic rates of 45 per cent. Between 80 per cent. and 85 per cent. of rate bills arise from the county precept. Therefore, the prime cause of these astonishing propsals seems to be the intention of South Glamorgan to impose an increase in its general rate of 21p over its main rate last year and 15p over its supplementary rate.
The proposals of the Labour-controlled county council seem extraordinary. The effect of reducing domestic rate relief is to increase block grant, which means that the

general rate should be 8½p in the pound less than would otherwise be the case. In those circumstances it is hard to conceive of a financial circumstance confronting the council that dictates an increase of 21p over its original main rate last year.
Let us look at what other counties have done. Where the average increase is not 21p but less than 2p. Three counties are not increasing their precept at all, and one—Gwynedd—is proposing to reduce its precept by 5p in the pound. If South Glamorgan cares at all about its ratepayers, job creation and the health of its businesses I hope that it will reconsider its proposals. If Labour Mid-Glamorgan, for example, with its social problems, can hold its rate, it is very odd, to say the least, that Labour South Glamorgan cannot exercise more restraint.
Of course, the effect on domestic ratepayers of my decision to reduce the level of domestic rate relief is an increase of about 9p, or 7 per cent., in the domestic rate, but that is a very different picture from the massive increases reported in South Glamorgan. I accept that there are bound to be some variations in domestic rate increases around this figure. But what ratepayers should clearly understand is that domestic rate increases over double figures are the results of decisions that are made by the local authorities themselves and over which I have no control. Such increases certainly do not arise from my decision to reduce the level of domestic rate relief.
The contrast between what is apparently happening in South Glamorgan and what is happening elsewhere is stark. Other local authorities have proved that on the basis of this settlement rates can be held down, although I appreciate that it will require a considerable effort by them to do that and maintain services.
Manpower levels, cut by about 4.6 per cent. over two years, will need to continue to fall. But if they do, and if every effort is made to keep costs down, there should be on average little or no rate increase for industry and commerce, and increases for domestic ratepayers should be less than those of recent years.
I look to Welsh local government to maintain its responsible approach and to seize the opportunity that this settlement undoubtedly gives it.

Mr. Alec Jones: After listening to the Secretary of State's speech, I am beginning to think that his contribution to local government in Wales has been so great that he must recently have been awarded the medal of honour by the Welsh Counties Committee or by the Council for the Principality. But when the rate bills, the rent increases and the increased water charges all come tumbling through the letter boxes, the people of Wales will feel the full impact of the settlement that we are discussing—both the financial effects and the continuing worsening of local authority services.
The key elements in the settlement are as follows: first, a further reduction in Government financial assistance to local authorities; secondly, false assumptions built into the settlement about the likely levels of inflation; thirdly, the most punitive increases in council rents; and, fourthly, the most unfair settlement yet devised for domestic ratepayers.
I was grateful to the Secretary of State for his technical explanation of the safety net, the power of the curve and matters of that nature. I assumed that having got away


from regression analysis, we were moving into simpler times, but that must have been a mistake which quite a few of us made.
This is the second separate Welsh rate support grant settlement. It is satisfying that the Secretary of State has introduced two new criteria which are important and will improve matters—one dealing with concessionary fares and the other the new method of dealing with unemployment. Both those affect the levels of expenditure by local authorities.
This is not just the second settlement: it is the second settlement with a reduced level in the grant percentage. The Secretary of State may say that it is only a small reduction, 0.9 per cent. in Wales. But how little is it in cash terms? The Secretary of State reminded us that the total relevant expenditure was £1, 300.8 million, 0.9 per cent. of that is £12 million. So the first good news from the settlement is that Wales loses that £12 million of Government grant.
In the settlement for 1982–83 there are two assumptions which are completely unrealistic. They are as unrealistic as is the Secretary of State's understanding of the problems facing Wales today. First, there is the assumption that wage and salary rises can be restricted to 4 per cent. for settlements between September 1981 and March 1983. That has already gone by the board. Local authority manual workers accepted pay settlements ranging from 6.3 per cent. to 7.8 per cent. Lest someone thinks that they behaved in a dreadful way, let us remind ourselves that their bottom basic rate, including the increase, is £63.65 and the top rate is £78.10 per week.
The second assumption is that all other costs can be contained within the 9 per cent. figure. The Government's record on inflation, which is running at 12 per cent., hardly gives credibility to the 9 per cent. figure. Most local authority members do not believe it, nor does any prudent council treasurer. The council treasurers will wisely have advised their members that neither the 4 per cent. ceiling on wage increases nor the 9 per cent. ceiling on other costs is realistic. They will have budgeted accordingly.
Let me quote from a newspaper report of what the chairman of the Welsh Counties Committee had to say about it:
The inflation assumption of 6 per cent"— that is taking the 9 per cent. and the 4 per cent.—
was totally unrealistic, … and to adhere to their spending limits Welsh local authorities would have to reduce services by at least 3 per cent.
That is what the assumptions behind the settlement will lead to.
There will be increasing pressure for further redundancies in local authority staff. The phrase now is not redundancies but "cutting manning levels". That may well suit the Secretary of State for Wales, but with unemployment running at 176, 000 in Wales we need more unemployment as much as we need a hole in the head. Already local authorities have taken a fair share of cuts. In the year ending September 1980 they have lost 4, 439 workers, a cut of 3.8 per cent. in their work force. In the year ending September 1981, they sustained a further loss of 3, 242, a cut of 2.8 per cent. There have been further losses since then.
That cutting of staff cannot continue year after year without seriously affecting both the quality and the quantity of local authority services, which are needed by the people of Wales. If we consider education as an

example, the year ending September 1980 saw a reduction of 174 in the number of lecturers and teachers employed. In the year ending September 1981 there was a further reduction of 999. Since last September, there have been further reductions. Whatever may be the merits of the argument of falling rolls, few educationists would accept that the loss of those teachers has had no serious effect on our schools and their pupils.
Built into the Secretary of State's settlement—a matter to which he referred at length in the Welsh Grand Committee, and I understand why he did not refer to it this evening—is the decision that there should be an increase in the local contribution to the housing revenue accounts of £2.50 per dwelling per week. That is a polite way of saying that council rents must rise by that sum. Council tenants may not be the most loved members of society by the Government, but they have had, and are having. an especially rough time from the Government. In 1979–80, the average weekly unrebated rent was £6.50. In 1980–81, there was a 24 per cent. increase, pushing it up to £8.09. In 1981–82 there was a 41 per cent. increase, pushing the rent up to £11.41 a week. For 1982–83, we are told that the settlement proposes a further 22 per cent. increase, pushing the average weekly unrebated rent up to £13.91. Of course, that is nearly the minimum. There would be extra increases in some authorities. The Vale of Glamorgan will be increasing its rents by £3 a week and Swansea by about £2.60. However, taking only the £2.50 on which the settlement is based, it means that council tenants are faced with a rent rise of 114 per cent. since the Government took office.

Mr. Hooson: Are not the increases of the past two years simply a catching-up on the process of unrealistic adjustment of the rents by the Labour Government?

Mr. Jones: Whatever the hon. Gentleman may believe, I find it impossible to accept that it is reasonable or proper to increase council rents by 114 per cent. in four years and to view it in such a way that 18 out of the 37 housing authorities in Wales now have a surplus on their housing revenue accounts. That surplus can be transferred in whole or in part to the general fund, so that we could find that council tenants are subsidising other council services. I know that the Secretary of State has said that he does not expect that to happen, but if it does happen what can and will he do to prevent this gross injustice to council tenants?
Last year the Secretary of State was rather proud of his achievement in maintaining the domestic rate relief at 36p in the pound. Today we heard a very different story. In the debate last year, the hon. Member for Anglesey (Mr. Best) said how much the retention of the domestic rate relief at 36p in the pound should be welcomed. Does the hon. Gentleman welcome this year's decision to cut domestic rate relief almost by half to 18.5 per cent? If the domestic ratepayers of Wales had received some magnificent gesture, bonus, benefit or blessing during the past year, one could understand it. The reduction of the domestic rate relief, according to the Welsh counties, should lead to an average rent increase of 9½p in the pound. It is true that we do not yet have the full picture, because, even when I spoke to some local authority people today, treasurers and councillors were wrestling with the impossible task:
I do not often quote the Western Mail, but I do so on this occasion. It said:


The Secretary of State was expecting single figures rises for domestic ratepayers.
I tried to get some idea of the effect that this settlement will have on domestic ratepayers. I found that in West Glamorgan it is expected that domestic rates will rise by 15 per cent. In Gwent the expected rise is 13 to 15 per cent., Mid-Glamorgan 12½ per cent., as long as there is no other increase in any district council, and in South Glamorgan 14.6 per cent., again excluding any district council increase. It is not easy to find what the situation is with district councils, but I understand that the Ceredigion council rate will rise by 17 per cent.
I agree with my old statement, which was read by the Secretary of State. I did not accept then, and I do not accept now, that there is a direct link between water charges and rates. However, it is strange that this year, above all, he should choose to surrender the domestic rate relief advantage that Wales has. This year householders are facing a double bill. They are asked to meet not just the rate increases but the massive increase in water charges.

Mr. Nicholas Edwards: I challenge the word "surrender." It seems to imply that the money has been lost to Wales. It has not. It remains with local government in Wales, for the benefit of the people of Wales. However, the priority at the moment is industry, commerce and jobs, about which the right hon. Gentleman has a lot to say, but about which he is not prepared to do anything.

Mr. Jones: The right hon. Gentleman is obviously touchy on this issue. It is a surrender, for the domestic ratepayers in Wales are being asked to subsidise jobs when that should properly be the responsibility of the Government.
Welsh householders are being asked to pay not only the increased rates directly brought about by the withdrawal of the advantageous domestic rate relief but an 18.3 per cent. increase in their water charges. It is no good saying that this is a matter for the Wales water authority. The Government threw away the advantages of the Water Charges Equalisation Act, which would have been worth £3 million to the water authority.
The hon. Gentleman knows that to be true, and a press release yesterday from the Wales water authority made the same statement. Thus, householders are being particularly heavily hit by the Government, first, by rates which are likely to be increased by about 15 percent., and, secondly, by the increase in the water rate of 18.3 per cent. Many of the householders are on the dole queue, while those who are fortunate enough to remain in work are asked to accept this level of water charge and rate increase, but a wage increase of only 4 per cent.
The Secretary of State justifies the sell-out on the domestic relief because it will give a boost to employment. I do not think that there is any Welsh Member who rejects or does anything other than welcome a boost to employment—although there has not been a great deal of that since the Government took office. However, there are other, better and fairer ways of boosting employment than by penalising the householder.
Next month we shall have the Budget. That should be the proper vehicle to boost employment. Then we can judge the Government's efforts in attracting jobs to Wales. At that stage they could act on proposals put to them, even

by their friends, to reduce or abolish the national insurance surcharge. That would do much more to boost employment than the way that they have chosen, of penalising the domestic ratepayers.
This squalid treatment of domestic ratepayers is like robbing Peter to pay Paul, and not all the Pauls who will receive the benefit need a boost. The non-domestic ratepayers who will benefit most from this order include the banks. I do not believe that Barclays Bank needs much of a boost. They also include building societies and bookmakers. Indeed, there is a whole range of non-domestic ratepayers. Certainly the Secretary of State's action gives a boost, but it gives a boost to the unworthy and worthy alike, and at the expense of Welsh domestic ratepayers.
The support that this order gives to Welsh local authorities is miserly. The order is woefully optimistic about inflation, and it is shamefully discriminating against both council tenants and domestic ratepayers. For those reasons, I urge my right hon. and hon. Friends to vote against it tonight.

Sir Anthony Meyer: The right hon. Member for Rhondda (Mr. Jones) had a lot of fun, claiming that the limitation of rate increases to industry would benefit the banks and the bookmakers. I must tell him that I have had many complaints from some well-heeled people in my constituency that the burden is being transferred from industry to the private ratepayer. It is an issue that sorts out the men from the boys, because if, as the Labour Party never ceases to tell us, we should give overriding priority to the creation of jobs, we should have the guts to limit the burden that we put on industry.
We in the Conservative Party believe in the importance of creating jobs, and we are prepared to pay the price to get them. All the eyewash of the Labour Party, which is prepared to back every strike that threatens jobs in Wales, will not wash when people really think about who is making the efforts to create jobs in Wales.
My right hon. Friend the Secretary of State has done a terrific job in fighting for the Welsh interests in the Cabinet. The settlement that he has secured is obviously not as good as we should have liked. We should all like to have had massive support by the British taxpayer for the Welsh ratepayer. However, he has secured a settlement which, by any standards, is a good one.
The chairman of Clwyd's finance committee—he is a member of the Labour Party, but he is a fair-minded man—went on record as saying that
thanks to the additional help from the county resulting from the general determination in Wales to meet Government restraints, they have been able to recommend an unchanged rate precept".
It is an example of a county council that does not have a Conservative majority, but which has adopted intelligent policies, by and large, going along with the Government, and co-operating with them in maintaining its precept this year. At the same time the council is keen to have—and why not?—an increase in its capital allocation. Hence the brief intervention that I made in my right hon. Friend's speech.
Having said that, I ask my right hon. Friend not to be tempted to think that the anger about the domestic rate level is something that will die down. The Conservative Party gave a pledge a long time ago that it would abolish the domestic rating system. Quite candidly, I am not at all


sure that that was a wise promise to give. I believe that some element of property taxation—of a rating system—should be preserved. Apart from anything else, it encourages the proper occupation of house space by penalising over-occupation and it is a cheap tax to collect. However, it has reached a level at which its unfairnesses become totally unacceptable.
I would not like to think that the Bill that is at present going through Committee will be taken by my right hon. Friends in the debate tonight as representing any excuse for a slackening in their zeal and determination to carry out that fundamental reform of the rating system that they are constantly promising us. Back Benchers will make sure that they live up to their word in that respect.
I hope that this debate will be, if not the last, at any rate the penultimate debate that we have in the House on the rate support grant in its present form. I hope that ways will be found— perhaps by transferring large blocks of expenditure from the rates to general taxation—to bring about that fundamental reform in the rating system that we have so often been promised.

Mr. Donald Anderson: Never have local authorities felt more under seige from a hostile Government than now. I see the expression of disbelief on the face of the Under-Secretary of State. However, I advise him to look through the pages of local authority journals, to look again at the Government's unsuccessful attempts to introduce a referendum before rate increases, at the attempts to curb supplementary rate increases and at the attempts to impose an average rent increase on local authorities as a whole. Local authorities generally feel battered and faced by a Government who are hostile to local democracy.
There are, however, some brighter features to this rate settlement. The Welsh share of the combined total of the English and Welsh settlements has increased, as a result of the separate rate support grant settlement, from 7.4 per cent. to 7.6 per cent. The cuts in the proportion of the total local government spending provided by central Government are lower in Wales than in England. The figure is 0.3 per cent. in Wales, compared with 3.1 per cent. in England. But that is still a cut at a time when there are increasing pressures on local authorities as a result of the Government-inspired recession and the ageing population that makes greater demands on our social services. Cuts at the margin affect, for example, the bus services that depend on the transport supplementary grant and the county grant from that. As we saw during the recent snow crisis, the reserves available to our local authorities are at historically low levels.
As has been pointed out, in setting the cash limit ceilings the Government have set totally unreal limits—the 4 per cent. pay suggestion from September 1981 until March 1983 and the 9 per cent. for other costs—that bear no relationship to the projections made by outside and objective forecasters on the likely level of pay settlements or for the course of inflation over that period. Those figures of 4 per cent. and 9 per cent. compare with 6 per cent. for earnings and 11 per cent. for prices in the last settlement. Given such totally unrealistic figures, one can feel only that the Welsh Office and the Department of the Environment have been infected by the optimism affecting Treasury Ministers. They continually talk about inflation falling as surely as day follows night. Inflation has been

bumping at about 12 per cent. for the past few months. Inflation is high in the United States of America and all the Government's forecasts have been way off course. The projections made and the limits that have been set must appear unrealistic. Ultimately, the ratepayers will have to pay. The element of choice that the Secretary of State claimed does not exist.
As a result, domestic ratepayers will suffer. The hon. Member for Flint, West (Sir A. Meyer) said, with his usual objectivity, that in 1974 the Prime Minister gave a pledge that she would abolish the rates. That pledge was repeated in the 1979 manifesto, but in a somewhat muted form. Given the parliamentary timetable, there is no way that those two clear pledges can be implemented before the next election. That remains true, however much the hon. Gentleman may say that he and his colleagues will do their best to remind the Prime Minister of those oft-repeated pledges.
After that pledge in the 1979 election, the increase in average domestic rate poundages in Wales in 1980–81 was 30.7 per cent. compared with the previous year. Following that pledge, in 1981–82 there was an average rate increase in Wales of 19.1 per cent. Thus we face the paradox that despite the general election promises in 1974 and 1979, the Government have added to the burdens of domestic ratepayers. In the process, they have made it more difficult to abolish domestic rates. They have made the domestic rate yield so large that the task of abolishing rates is even more herculean. Domestic rate relief has been halved and, despite what has been said, that used to be billed as compensation for Wales for the high water charges. As a result, the Swansea ratepayer in 1982–83 will face a 15.8 per cent. increase in domestic rates. Because of the abolition of domestic rate relief there will be an increase of 3.5 per cent. for industrial and commercial users. Nevertheless, water rates are certain to rise by about 18.3 per cent.
Given the high rate of unemployment, there is a case for a bias in favour of industrial and commercial users. However, as has been said, the Secretary of State's bounty falls on the unjust and the just. Surveys of small businesses in Wales show that an abolition or reduction of the national insurance surcharge would he far more beneficial than a rate reduction.

Mr. Nicholas Edwards: Does the hon. Gentleman agree that the criticism made by his right hon. Friend the Member for Flint, East (Mr. Jones) about the indiscriminate nature of the help given to banks and others applies equally well to the national insurance surcharge?

Mr. Anderson: If one accepts that point, the survey suggests that the overall benefit, accepting the capricious way it falls, will be greater for small businesses as a result of the national insurance surcharge reduction.
The Government have raised expectations about the abolition of rates. They have done nothing about it. It is clear that nothing will be done. It would be helpful to have a Welsh Office estimate of the average increase in domestic rates this year. We know that the abolition of rates proposed in the 1979 general election was just another promise. Like "Labour isn't working", it was another con trick.

Mr. Geraint Howells: In Wales we have been a little more fortunate than in England. That is


entirely due to the fact that, following the concessions made in 1980, Wales has been given separate treatment, a move that has long been advocated by Welsh Liberals. We have been given more cash than might otherwise have been expected under the old system, which was entirely dominated by London. Thus, local councils have been able to cope better with the financial stringencies currently in force.
I congratulate the Secretary of State for Wales on making a genuine attempt to consult the Welsh local authorities, in contrast with the attitude of the Secretary of State for the Environment and his dealings with the English authorities. That shows the wisdom of devolving power, although Welsh Liberals are not entirely happy that the power should reside with the Secretary of State for Wales; rather it should reside with a Welsh Assembly.
We should like to see the present two-tier system of local government revised, if not abolished altogether, as over the past few years it has added considerably to the expense of running local government. Liberals would also like to see a radical reform of the rating system.
However, tonight, as we have only a few minutes left, it is wiser for me to ask the Secretary of State to answer the following simple questions. What effect will the new proposals have on rural constituencies such as Cardigan? What effect will they have on local services? Will they affect unemployment in Wales? Will there be a reduction in the staff of local authorities?
My final question is important. Does the Secretary of State believe that the increase of 18.3 per cent. in domestic water rates in Wales is reasonable or fair? Clarification on those points and answers to those questions would be gratefully received not only by hon. Members, but by the Welsh electorate.

Mr. Ray Powell: The Ministers on the Front Bench, who are devotees of reactionary monetary policies, are responsible for the total collapse of local government morale in Wales, from the chief executives in county borough districts to community council clerks. Elected representatives will stand for re-election only because they hope for the early return of a Labour Government. Why? Because the autonomy that they once had has been relentlessly and ruthlessly torn from them. The service that they give freely and happily to the public to administer local government and to meet the real needs of the people has slipped right out of their hands and back to this place, where administration is so tied up with tradition and red tape that it takes a constitutional genius to get 10 minutes to discuss a major disaster.
Let us examine briefly what the Conservative Administration have done to local government. It has shackled it so tightly to central Government that it is practically impossible for local authorities to find funds to maintain existing facilities. Local authorities have slashed labour forces, not because they are not needed but because the authorities have no funds to pay them. Education has been slashed, not because authorities wished to do so but because they were threatened by the rate support grant axe wielded by the Secretary of State for Wales.
From playschools and playgrounds to parks and playing fields, paths and pavements, from school transport, school meals and school books to school teachers and in some

areas even schools themselves, all have had to be slashed. Transport in Wales is in a mess, housing is in decline, and health and social services a disaster area. Lollipop ladies, school dinner ladies, school cleaners and social workers have been thrown out of their jobs. Meals on wheels for the elderly are becoming a treat from the past and home helps are once again becoming the charladies of the rich. It is not just the return of unemployment to the 1930s but the return of school leavers to domestic service and the return of the workers to serfdom—all brought about by two and a half years of Thatcherism.
The Government have squeezed local government finance to such an extent that the pips are past squeaking—they are howling. Local government finance measures of this kind are designed to take away from local government in Wales all pretence of local democratic decision making on finance. The level of rate will be fixed and assessment of standing needs by the Government based fundamentally on grant-related expenditure, plus some margin also prescribed by the Secretary of State. Industrial, commercial and business ratepayers will be marginally better off, but the domestic ratepayer will suffer. With water rates, gas charges, council house rents and price escalation coupled with a 4 per cent. limit on pay increases, it is no wonder that mental illness is increasing and marriage breakdowns multiplying. To add insult to injury and to rub salt in the wound, Tarzan himself, the Secretary of State for the Environment, is not now threatening to throw the Mace at hon. Members but he told Young Conservatives at Harrogate last weekend about the evils of unemployment in the following terms:
I see lack of work and denial of achievement as a corrupting force beyond measure.
He claimed to feel a deep sense of concern and continued:
Where do you go on rainy days, how do you persuade children to respect Society that appears to have rejected their parents and in the end, upon what rock of faith do you take your stand?
That is hyper-hypocrisy from one who has caused hundreds of thousands of those parents to be kicked out of work in local government, and with the measures just agreed and these proposals for Wales designed to throw even more out of work. The Secretary of State for Wales, his ministerial colleagues and all the lackeys on the Conservative Back Benches agree that there is no turning back now. The Tory Party chairman stated last weekend:
If we fudge now we shall earn nothing but the electorate's contempt.
I have news for the Secretary of State, the Government and Ladbrokes. The electorate's contempt is seething and must be expressed. If the Government are so sure of their fate and so sure that they have the electorate's confidence, why do they not test it and put it to the vote? I call on my colleagues to vote against these further restrictions on local government. I invite councillors throughout the Principality to read the result of the vote tonight so that they know who and where their friends are.

Mr. Deputy Speaker (Mr. Bryant Godman Irvine): Mr. Donald Coleman.

Mr. Dafydd Wigley: On a point of order, Mr. Deputy Speaker. Why has it not been possible to call every party's representative on a matter which is of vital importance to every party in every part of Wales?

Mr. Deputy Speaker: The matter is entirely in the discretion of the Chair.

Mr. Wigley: Futher to that point of order, Mr. Deputy Speaker. It is totally unreasonable that the Chair should not make it possible for every view in the Chamber to be expressed. It is impossible for members of my party to retain confidence in the Chair if that cannot be accomplished.

Mr. Deputy Speaker: I can assure the hon. Gentleman that the best is done on all occasions.

Mr. Wigley: I must insist, Mr. Deputy Speaker——

Mr. Deputy Speaker: Order, order.

Mr. Wigley: We are squeezed out of debates in the Chamber——

Mr. Deputy Speaker: Order, order.

Mr. Wigley: We are——

Mr. Deputy Speaker: Order, order. I must ask the hon. Gentleman to resume his seat.

Mr. Wigley: It is not possible for us to express our viewpoint. We shall not accept——

Mr. Deputy Speaker: Order. I ask the hon. Gentleman to resume his seat.

Mr. Wigley: It is totally unreasonable.

Mr. Deputy Speaker: Order. The only thing that I can do is to ask the hon. Gentleman to leave the Chamber.

Mr. Wigley: It is totally unreasonable.

Mr. Deputy Speaker: I ask the hon. Member to leave the Chamber.

Mr. Wigley: I do so under protest.

Mr. Deputy Speaker: There is no protest.

Mr. Wigley: I do so under protest on behalf of my party at the inability of this Parliament to give Wales fair play.

Mr. Donald Coleman: The Opposition have two main objections to the rate support settlement. We are anxious about the support given to the domestic ratepayer in the settlement, which is being reduced. We are also concerned about the increase in council house rents.
The level of support to the domestic ratepayer is to be reduced from a relief of 36p to 18½p in the pound. If there is a shortfall in local authority spending requirements, the burden of meeting that shortfall will have to be met by the domestic ratepayer.
The Secretary of State when announcing the rate support grant settlement for 1982–83, said that he thought that the rate increases in Wales flowing from the settlement should be much lower than in recent years. He went on to say that the reduction in domestic rate relief, with the corresponding increase in block grant, would provide an excellent opportunity to boost employment in Wales.
That sounds fine, provided that there is no problem with wage settlements being kept at 4 per cent. and that there is an inflation rate of no more than 9 per cent. There has been a chorus recently—and the Secretary of State was part of it—claiming that rates paid by industry and commerce add to the unemployment total. That claim is advanced without the evidence to support it. Many

economists challenge that view. They believe that if there is less than full employment an increase in public expenditure should take place. They believe that local government expenditure should be increased to improve employment.
We should not forget that local government is a large and direct employer and that the spending power of its employees helps to sustain demand for private sector products. Cuts in rates would mean cuts in spending, both by local government directly and by those it would employ. That would lead, in turn, to job losses in industry and commerce.
Mr. Steve Hughes, the principal officer of the AMA, wrote in the October 1981 issue of Municipal Review that the latest figures showed that rate payments in 1978, represented only 0.7 per cent. of total manufacturing costs. When we compare rates with wages and salaries in manufacturing and construction industries for a more recent period, we find that rates were about 1.9 per cent. of the wage and salary bill in 1975 and 1980 and somewhat less in the intervening years.
Since 1975 rates have grown less quickly than the price of manufactured goods, the retail price index, the cost of materials and fuel bought by manufacturing industry and average earnings in manufacturing industry. A significant item in the discussion is the increase in interest charges, which rose by 94 per cent. between 1978 and 1980, while rates rose by only 48 per cent.
As for the relief being given by the Government to non-domestic ratepayers, Mr. Frank Othick wrote in the Local Government Review in December 1981:
It is inequitable, unjust and unreasonable that the non-domestic ratepayer should be treated more generously for property rating purposes than those who do not enjoy tax and trading privileges. Selective, not blanket relief, could, however, be justified in cases of business hardship.
Clearly, the category of non-domestic ratepayer needs close attention, particularly in the light of the Government's treatment of the domestic ratepayer.
My right hon. Friend the Member for Rhondda (Mr. Jones) mentioned the position of banks, building societies, off-licence operators and other nationally known firms including bookmakers, in our high streets. He said that they will benefit from the better treatment given to them in preference to the domestic ratepayer. We are also concerned about the increase in council house rents and we believe that we are right to call on the House to divide against the motion.

Mr. Nicholas Edwards: The hon. Member for Neath (Mr. Coleman) seemed to think that rates are not important to industry. That is not the view of industry. One of the main points put by the CBI representatives who came to see me a week or so ago was that the reduction in the rate burden was a top priority.
In answer to the hon. Member for Merioneth (Mr. Thomas), who raised a point at the start of the debate, I confirm that GREs are established for the purpose of block grant and are not hypothecated. It is the desire of Welsh local authorities that the figures that he requested should not be published, but the information on comparative costs is available in the CIPFA publication and that is probably the best material for his purpose.
We heard suggestions from the hon. Member for Swansea, East (Mr. Anderson) and the hon. Member for


Ogmore (Mr. Powell) that local authorities were under siege. The answer to that suggestion was rather effectively given by the hon. Member for Cardigan (Mr. Howells), who said that the separate rate support grant arrangements for Wales, which I introduced, meant that more cash than otherwise might be expected had gone to Wales than under the old system. He congratulated me for making a genuine attempt to consult the Welsh local authorities.
The hon. Member for Cardigan spoke about effects on his local authority. I am pleased to see that Dyfed is apparently proposing no change in its precept. I hope that that will lead to a low increase, certainly for the industrial ratepayers in that area.
The hon. Member for Ogmore made a remarkable speech and I find it hard to believe that the inhabitants in his constituency are all now in domestic service, which seemed to be the impression he attempted to give. He suggested that local government "slashed", to use his word, its labour force when reducing it by 4.6 per cent. over two years. During that period the Welsh Office numbers were reduced by 13 per cent., not through redundancies as suggested by one hon. Gentleman but through natural wastage.
Perhaps the best answer to the speech of the right hon. Member for Rhondda (Mr. Jones) was given by my hon. Friend the Member for Flint, West (Sir A. Meyer) who said that it was all "eyewash". The real answer is found in the unchanged rate precepts of many local authorities. The fact that they have been able to proceed on an unchanged rate precept basis suggests that the whole case advanced by the right hon. Member for Rhondda—that we were asking them to do something impossible and unreasonable—was absurd.
In suggesting that the reduced percentage of grant cost Wales £12 million—the right hon. Member for Rhondda wrote his speech before mine—he carefully ignored that I had increased current expenditure. As I told the House, the volume of central Government support is higher than it was a year ago; it is now £7 million more than if we had maintained the grant percentage at the original planned expenditure levels.
The right hon. Gentleman then referred to the reduction in teacher numbers. He failed to say that there was a fall of about 50, 000 in pupil numbers since 1977–78 and that the pupil-teacher ratio in Wales was at an all-time best level. There was no mention of that from the right hon. Gentleman.
I debated the rent issue recently in the Welsh Grand Committee and I do not propose to go over that ground again, except to remind the House that 46 per cent. of all Welsh local authority tenants receive rent rebate assistance. That ought to be considered when making a judgment on the issues raised by the right hon. Gentleman.
The right hon. Member for Rhondda and other hon. Members referred to water charges. This is not the time to debate those issues, but it is worth saying, since the 18.3 per cent. increase in water charges was mentioned in this context, that if the water equalisation measures had still existed the effect would not have been more than about 2 per cent. on that. It did not occur because of the abandonment of that curious scheme—which had the effect of giving help to many areas where the charges were low and taking it from many where the charges were high—but because the Wales water authority failed

sufficiently to reduce its manning and expenses and to adjust sufficiently to the changed circumstances in which it had to operate.
A case cannot be made out for basing domestic rate relief in Wales on the assumption of water charges when, after all, that was expressly repudiated by the right hon. Member for Rhondda when he was in Government. I make no apology for transferring the domestic rate relief to industrial and commercial users.
I cannot see the justification for maintaining domestic rate levels at such a substantially lower level than in England when surely the priority in Wales should be to give the maximum help to those engaged in industry and commerce. The fact that we are able to hold rate levels for industry and commerce this year at a level that will be nearly unchanged will make a real contribution to job creation.
What really matter now are the local authorities' decisions. It has been argued that the Government's inflation assumptions may not turn out to be right. It is not impossible for local government to reduce manning on the scale that it has been reducing it over the past year or two, or even to do rather better than that. If it does that and holds its costs, there is no reason for local government to burden ratepayers at this time. It should look to its priorities and remember that the protection of its ratepayers, especially its industrial and commercial ratepayers——
It being one and a half hours after the commencement of proceedings on the motion, MR. DEPUTY SPEAKER put the Question, pursuant to Standing Order No. 3 (Exempted Business):——

The House divided: Ayes 311, Noes 208.

Division No. 69]
[11.45 pm


AYES


Adley, Robert
Bruce-Gardyne, John


Alexander, Richard
Bryan, Sir Paul


Alison, Rt Hon Michael
Buck, Antony


Alton, David
Budgen, Nick


Amery, Rt Hon Julian
Bulmer, Esmond


Ancram, Michael
Butcher, John


Arnold, Tom
Cadbury, Jocelyn


Aspinwall, Jack
Carlisle, Kenneth(Lincoln)


Atkins, Rt Hon H. (S'thorne)
Carlisle, Rt Hon M. (R'c'n)


Atkins, Robert (Preston N)
Chalker, Mrs. Lynda


Atkinson, David (B'm'th, E)
Channon, Rt. Hon. Paul


Baker, Kenneth (St.M'bone)
Chapman, Sydney


Baker, Nicholas (N Dorset)
Churchill, W.S.


Beaumont-Dark, Anthony
Clark, Hon A. (Plym'th, S'n)


Beith, A. J.
Clark, Sir W. (Croydon S)


Bendall, Vivian
Clarke, Kenneth (Rushcliffe)


Benyon, Thomas (A 'don)
Clegg, Sir Walter


Benyon, W. (Buckingham)
Cockeram, Eric


Best, Keith
Colvin, Michael


Bevan, DavidGilroy
Cope, John


Biffen, RtHonJohn
Corrie, John


Biggs-Davison, SirJohn
Costain, Sir Albert


Blackburn, John
Cranborne, Viscount


Blaker, Peter
Critchley, Julian


Body, Richard
Crouch, David


Bonsor, SirNicholas
Dean, Paul (North Somerset)


Boscawen, HonRobert
Dickens, Geoffrey


Bottomley, Peter (W'wich W)
Dorrell, Stephen


Bowden, Andrew
Douglas-Hamilton, LordJ.


Boyson, Dr Rhodes
Dover, Denshore


Bright, Graham
du Cann, Rt Hon Edward


Brinton, Tim
Dunn, Robert (Dartford)


Brittan, Rt. Hon. Leon
Durant, Tony


Brooke, Hon. Peter
Dykes, Hugh


Brotherton, Michael
Eden, Rt Hon Sir John


Brown, Michael (Brigg &amp; Sc'n)
Edwards, Rt. Hon N. (P'broke)


Browne, John (Winchester)
Eggar, Tim






Elliott, Sir William
Latham, Michael


Ellis, Tom (Wrexham)
Lawrence, Ivan


Emery, Sir Peter
Lawson, Rt Hon Nigel


Eyre, Reginald
Lee, John


Fairbairn, Nicholas
LeMarchant, Spencer


Fairgrieve, Sir Russell
Lennox-Boyd, Hon Mark


Faith, MrsSheila
Lester, Jim (Beeston)


Farr, John
Lewis, Kenneth (Rutland)


Fell, Sir Anthony
Lloyd, Ian (Havant &amp; W'loo)


Fenner, Mrs Peggy
Lloyd, Peter (Fareham)


Finsberg, Geoffrey
Loveridge, John


Fisher, Sir Nigel
Luce, Richard


Fletcher, A. (Ed'nb'gh N)
Lyell, Nicholas


Fletcher-Cooke, SirCharles
McCrindle, Robert


Fookes, Miss Janet
Macfarlane, Neil


Forman, Nigel
MacGregor, John


Fowler, Rt Hon Norman
MacKay, John (Argyll)


Fox, Marcus
Macmillan, Rt Hon M.


Fraser, Peter (South Angus)
McNair-Wilson, M. (N'bury)


Fry, Peter
McNair-Wilson, P. (New F'st)


Gardiner, George (Reigate)
McQuarrie, Albert


Gardner, Edward (S Fylde)
Major, John


Garel-Jones, Tristan
Marland, Paul


Gilmour, Rt Hon Sir Ian
Marlow, Antony


Glyn, Dr Alan
Marshall, Michael (Arundel)


Goodhart, SirPhilip
Mates, Michael


Goodlad, Alastair
Maude, Rt Hon Sir Angus


Gorst, John
Mawby, Ray


Gow, Ian
Mawhinney, Dr Brian


Grant, Anthony (Harrow C)
Maxwell-Hyslop, Robin


Gray, Hamish
Mayhew, Patrick


Greenway, Harry
Meyer, Sir Anthony


Grieve, Percy
Miller, Hal (B'grove)


Griffiths, E. (B'y St.Edm'ds)
Mills, lain (Meriden)


Griffiths, Peter Portsm'th N)
Mills, Peter (West Devon)


Grist, Ian
Mitchell, David (Basingstoke)


Grylls, Michael
Moate, Roger


Gummer, JohnSelwyn
Monro, SirHector


Hamilton, Hon A.
Montgomery, Fergus


Hamilton, Michael (Salisbury)
Moore, John


Hampson, Dr Keith
Morgan, Geraint


Hannam, John
Morris, M. (N'hampton S)


Haselhurst, Alan
Morrison, Hon C. (Devizes)


Hastings, Stephen
Mudd, David


Havers, Rt Hon Sir Michael
Murphy, Christopher


Hawksley, Warren
Myles, David


Hayhoe, Barney
Neale, Gerrard


Heddle, John
Needham, Richard


Henderson, Barry
Nelson, Anthony


Heseltine, Rt Hon Michael
Neubert, Michael


Hicks, Robert
Newton, Tony


Higgins, Rt Hon Terence L.
Normanton, Tom


Hill, James
Nott, RtHon John


Hogg, Hon Douglas (Gr'th'm)
Onslow, Cranley


Holland, Philip (Carlton)
Oppenheim, Rt Hon Mrs S.


Hooson, Tom
Osborn, John


Hordern, Peter
Page, John (Harrow, West)


Howe, Rt Hon Sir Geoffrey
Page, Richard (SW Herts)


Howell, RtHonD. (G'ldf'd)
Parkinson, Rt Hon Cecil


Howell, Ralph (NNorfolk)
Parris, Matthew


Howells, Geraint
Patten, Christopher (Bath)


Hunt, David (Wirral)
Pattie, Geoffrey


Hunt, Jobn (Ravensbourne)
Pawsey, James


Hurd, HonDouglas
Penhaligon, David


Irving, Charles (Cheltenham)
Percival, Sirlan


Jenkin, Rt Hon Patrick
Peyton, RtHon John


JohnsonSmith, Geoffrey
Pink, R.Bonner


Jopling, Rt Hon Michael
Pollock, Alexander


Joseph, RtHon Sir Keith
Porter, Barry


Kaberry, SirDonald
Prentice, Rt Hon Reg


Kellett-Bowman, MrsElaine
Price, Sir David (Eastleigh)


Kershaw, Sir Anthony
Prior, RtHon James


Kimball, SirMarcus
Proctor, K. Harvey


King, Rt Hon Tom
Pym, Rt Hon Francis


Kitson, SirTimothy
Raison, Timothy


Knight, MrsJill
Rathbone, Tim


Knox, David
Rees-Davies, W. R.


Lamont, Norman
Renton, Tim


Lang, Ian
Rhodes James, Robert


Langford-Holt, SirJohn
Ridley, HonNicholas





Ridsdale, Sir Julian
Thatcher, Rt Hon Mrs M.


Rifkind, Malcolm
Thomas, Rt Hon Peter


Roberts, M. (Cardiff NW)
Thompson, Donald


Roberts, Wyn (Conway)
Thorne, Neil (Ilford South)


Roper, John
Thornton, Malcolm


Rossi, Hugh
Townend, John (Bridlington)


Rost, Peter
Townsend, Cyril D.(B'heath)


Sainsbury, Hon Timothy
Trippier, David


St. John-Stevas, Rt Hon N.
Trotter, Neville


Shaw, Giles (Pudsey)
van Straubenzee, SirW.


Shaw, Michael (Scarborough)
Vaughan, Dr Gerard


Shelton, William (Streatham)
Viggers, Peter


Shepherd, Colin (Hereford)
Waddington, David


Shepherd, Richard
Wakeham, John


Shersby, Michael
Waldegrave, Hon William


Silvester, Fred
Walker, B. (Perth)


Sims, Roger
Walker-Smith, Rt Hon Sir D.


Skeet, T. H. H.
Wall, Sir Patrick


Smith, Dudley
Waller, Gary


Speed, Keith
Walters, Dennis


Speller, Tony
Ward, John


Spence, John
Warren, Kenneth


Spicer, Jim (West Dorset)
Watson, John


Spicer, Michael (S Worcs)
Wells, Bowen


Sproat, lain
Wells, John (Maidstone)


Squire, Robin
Wheeler, John


Stainton, Keith
Whitelaw, Rt Hon William


Stanbrook, Ivor
Whitney, Raymond


Stanley, John
Wickenden, Keith


Steel, Rt Hon David
Wiggin, Jerry


Steen, Anthony
Wilkinson, John


Stevens, Martin
Williams, D. (Montgomery)


Stewart, A. (ERenfrewshire)
Winterton, Nicholas


Stewart, Ian (Hitchin)
Wolfson, Mark


Stokes, John
Young, SirGeorge (Acton)


Stradling Thomas, J.
Younger, Rt Hon George


Tapsell, Peter



Taylor, Teddy (S'end E)
Tellers for the Ayes:


Tebbit, Rt Hon Norman
Mr. Anthony Berry and


Temple-Morris, Peter
Mr. Carol Mather.




NOES


Abse, Leo
Cunningham, Dr J. (W'h n)


Allaun, Frank
Dalyell, Tam


Anderson, Donald
Davidson, Arthur


Archer, Rt Hon Peter
Davies, Rt Hon Denzil (L' lli)


Ashley, Rt Hon Jack
Davies, Ifor (Gower)


Ashton, Joe
Davis, Clinton (Hackney C)


Atkinson, N. (H'gey,)
Davis, Terry (B'ham, Stechf'd)


Bagier, Gordon AT.
Deakins, Eric


Barnett, Guy (Greenwich)
Dean, Joseph (Leeds West)


Barnett, Rt Hon Joel (H'wd)
Dewar, Donald


Bennett, Andrew (St'kp't N)
Dixon, Donald


Bidwell, Sydney
Dobson, Frank


Booth, Rt Hon Albert
Dormand, Jack


Boothroyd, Miss Betty
Douglas, Dick


Bray, Dr Jeremy
Dubs, Alfred


Brown, Hugh D. (Provan)
Duffy, A. E. P.


Brown, R. C. (N'castle W)
Dunnett, Jack


Brown, Ron (E'burgh, Leith)
Dunwoody, Hon Mrs G.


Buchan, Norman
Eadie, Alex


Callaghan, Rt HonJ.
Eastham, Ken


Callaghan, Jim (Midd't'n &amp; P)
Ellis, R. (NE D'bysh're)


Campbell, Ian
English, Michael


Campbell-Savours, Dale
Ennals, Rt Hon David


Canavan, Dennis
Evans, loan (Aberdare)


Cant, R. B.
Evans, John (Newton)


Carter-Jones, Lewis
Ewing, Harry


Clark, Dr David (S Shields)
Field, Frank


Cocks, Rt Hon M. (B'stol S)
Flannery, Martin


Cohen, Stanley
Fletcher, Ted (Darlington)


Coleman, Donald
Foot, Rt Hon Michael


Concannon, Rt Hon J. D.
Ford, Ben


Conlan, Bernard
Forrester, John


Cook, Robin F.
Foster, Derek


Cowans, Harry
Foulkes, George


Craigen, J. M. (G'gow, M'hill)
Fraser, J. (Lamb'th, N'w'd)


Crowther, Stan
Freeson, Rt Hon Reginald


Cryer, Bob
Garrett, John (Norwich S)


Cunliffe, Lawrence
Garrett, W. E. (Wallsend)






George, Bruce
McKelvey, William


Gilbert, Rt Hon Dr John
MacKenzie, Rt Hon Gregor


Golding, John
McNamara, Kevin


Graham, Ted
McTaggart, Robert


Grant, George (Morpeth)
McWilliam, John


Hamilton, James (Bothwell)
Marshall, D (G'gowS'ton)


Hamilton, W. W. (C'tral Fife)
Marshall, Dr Edmund (Goole)


Hardy, Peter
Marshall, Jim (Leicester S)


Harrison, Rt Hon Walter
Martin, M (G'gow S'burn)


Haynes, Frank
Maxton, John


Healey, Rt Hon Denis
Maynard, Miss Joan


Heffer, Eric S.
Meacher, Michael


Hogg, N. (E Dunb't'nshire)
Mikardo, lan


Holland, S. (L'b'th, Vauxh'll)
Millan, Rt Hon Bruce


HomeRobertson, John
Miller, Dr M.S. (E Kilbride)


Homewood, William
Morris, Rt Hon A. (W'shawe)


Hooley, Frank
Morris, Rt Hon J. (Aberavon)


Howell, Rt Hon D.
Morton, George


Hoyle, Douglas
Moyle, Rt Hon Roland


Huckfield, Les
Newens, Stanley


Hughes, Mark (Durham)
Oakes, Rt Hon Gordon


Hughes, Robert (Aberdeen N)
O'Neill, Martin


Hughes, Roy (Newport)
Orme, Rt Hon Stanley


Janner, Hon Greville
Palmer, Arthur


Jay, Rt Hon Douglas
Park, George


John, Brynmor
Parker, John


Johnson, James (Hull West)
Parry, Robert


Johnson, Walter (Derby S)
Pavitt, Laurie


Jones, Rt Hon Alec (Rh'dda)
Pendry, Tom


Jones, Barry (East Flint)
Powell, Raymond (Ogmore)


Jones, Dan (Burnley)
Prescott, John


Kerr, Russell
Race, Reg


Kilroy-Silk, Robert
Radice, Giles


Kinnock, Neil
Rees, Rt Hon M (Leeds S)


Lambie, David
Roberts, Mberl (Normanton)


Lamborn, Harry
Roberts, Allan (Bootle)


Lamond, James
Roberts, Ernest (Hackney N)


Leadbitter, Ted
Robinson, G. (Coventry NW)


Leighton, Ronald
Rooker, J. W.


Lestor, Miss Joan
Ross, Ernest (Dundee West)


Lewis, Arthur (N'ham NW)
Rowlands.Ted


Lewis, Ron (Carlisle)
Ryman, John


Litherland, Robert
Sever, John


Lofthouse, Geoffrey
Shearman, Barry


Lyon, Alexander (York)
Sheldon, Rt Hon R.


Mabon, Rt Hon Dr J. Dickson
Shore, Rt Hon Peter


McDonald, DrOonagh
Silkin, Rt Hon J. (Deptford)


McElhone, Frank
Silkin, Rt Hon S. C. (Dulwich)


McGuire, Michael (lnce)
Silverman, Julius


McKay, Allen (Penistone)
Skinner, Dennis





Snape, Peter
Welsh, Michael


Spearing, Nigel
White, Frank R.


Spriggs, Leslie
White, J. (G'gow Pollok)


Stallard, A.W.
Whitehead, Phillip


Stoddart, David
Whitlock, William


Stott, Roger
Wigley, Dafydd


Straw, Jack
Williams, Rt Hon A. (S'sea W)


Summerskill, Hon Dr Shirley
Wilson, Rt Hon Sir H. (H'ton)


Thomas, Dafydd (Merioneth)
Wilson, William (C'try SE)


Thorne, Stan (Preston South)
Winnick, David


Tilley, John
Woodall, Alec


Tinn, James
Woolmer, Kenneth


Urwin, Rt Hon Tom
Wright, Sheila


Varley, Rt Hon Eric G.
Young, David (Bolton E)


Wainwright.E. (Dearne V)



Walker, Rt Hon H. (D'caster)
Tellers for the Noes:


Watkins, David
Mr. Hugh McCartney and


Weetch, Ken
Mr. Austin Mitchell.

Question accordingly agreed to.

Resolved,

That the Welsh Rate Support Grant Report 1982, a copy of which was laid before this House on 28th January, be approved.

Resolved,

That the Welsh Rate Support Grant Supplementary Report 1982, a copy of which was laid before this House on 28th January, be approved.—[Mr. Nicholas Edwards.]

PROCEDURE (FINANCE)

Ordered,

That Mr. Roger Sims and Mr. Peter Thomas be discharged from the Select Committee on Procedure (Finance) and Mr. Nicholas Lyell, Mr. Kevin McNamara and Mr. Chris Patten be added to the Committee.—[Mr. Boscawen.]

STATUTORY INSTRUMENTS, &c.

Motion made, and Question put forthwith pursuant to Standing Order No. 73A (Standing Committee on Statutory Instruments, &amp; c.)

Social Security

That the draft Social Security (Contributions) (Mariners) Amendment Regulations 1982, which were laid before this House on 25th January, be approved.—[Mr. Boscawen.]

Question agreed to.

Orders of the Day — STOCK TRANSFER BILL

Order for Second Reading read.

Motion made, and Question put forthwith, pursuant to Standing Order No. 66 (Second Reading Committees),

That the Bill be now read a Second time.

Question agreed to.

Bill accordingly read a Second time.

Bill committed to a Standing Committee pursuant to Standing Order No. 40 (Committal of Bills).

Orders of the Day — Halifax (Industry)

Motion made, and Question proposed,  That this House do now adjourn.—[Mr. Boscawen.]

12 midnight

Dr. Shirley Summerskill: I was provoked to raise the industrial situation in Halifax in an Adjournment debate by two particularly disastrous developments in my constituency that took place in the same week recently. First, the unemployment figure broke through the 6, 000 barrier, with a total of 6, 046 jobless in the town at the last count. The second development was that Carpets International Ltd. a Halifax firm with an international reputation, which has twice been awarded the Queen's Award for Exports, announced that over 500 redundancies were to take place. These tragic events in the same week symbolised the industrial decline in my constituency, a decline which in one way or another affects every factory and every family in Halifax.
With regard to unemployment, ever since the Industrial Revolution Halifax has been traditionally to some extent protected from severe unemployment by the wide range of its manufacturing industries, although the main ones have been textiles, carpets and engineering. Since May 1979 not only has the actual figure of those unemployed soared to over 6, 000 but the rate of unemployment has risen steeply over a relatively short time. Since this Government took office, it has gone up by over 180 per cent., making it harder for the town's industry to adapt to the change. I hope that the Minister will consider the important factor of the rate of change as well as the total number of unemployed.
I have not been able to include in the total the hidden unemployment among women who do not register. This could run into thousands because a large proportion of the women in my constituency work outside the home. Halifax is rapidly becoming divided into two nations—the employed and those without a job. As one goes round, one meets groups of people who are divided into those two categories. This is not only socially divisive, but it is an economic disaster for the town and its people.
Although this debate is about Halifax there is a similar problem in Calderdale as a whole. The Halifax jobless cannot go to the surrounding area for work. In the past three years more than 7, 500 workers have lost their jobs in Calderdale, according to figures just produced by West Yorkshire county council. The figures also showed that only one third of the jobs lost in Calderdale were replaced by new vacancies in the district.
The factory closures and redundancies are symbolished by the recent announcement by Carpets International Ltd.

of over 500 redundancies. That is the latest in a series of blows that Halifax has had to bear. It represents a psychological and economic disaster for the town. The Prime Minister visited the firm before the previous general election, when its proud boast was "We carpet the world". It was founded in the 1800s by Mr. John Crossley and became one of the largest carpet manufacturers in the world. Not only the carpet industry but the textile industry in Halifax has been hit by the massive redundancies that have taken place, especially in West Yorkshire. I am glad to see my hon. Friends from West Yorkshire behind me—the hon. Member for Huddersfield, East (Mr. Sheerman) and the hon. Member for Batley and Morley (Mr. Woolmer).
Not only have the mills been closing one after another, but no other industry in Britain has suffered as many job losses. Nearly every manufacturing firm in Halifax has been affected in some way or another by Government policies. If they have not closed, they have declared redundancies or people are on short time or, in some way, they are finding business difficult. Mackintosh's Toffees, another internationally famous firm and also a winner of the Queen's Award for Exports is the largest private manufacturing firm in Halifax, but it is complaining about being hit by value added tax, by inflation that is still over 2 per cent. higher than when the Labour Government left office, and by interest rates.
The engineering and machine tool firms are another part of the backbone of Halifax's industry. In May 1980, John Stirk and Sons closed. Last year, Staveley Machine Tools closed its Asquith division and Modern Foundries has announced its closure. All those closures, together with thousands of redundancies in other firms that I have not named are especially intolerable because there is no alternative work in the town or elsewhere for the jobless. Also, if Britain comes out of the recession, where are the factories to provide the jobs? As training is totally inadequate, where will the skilled work force come from? Britain will depend upon towns such as Halifax for its future prosperity. Some of its industry must be preserved before it is too late.
Apart from reversing their failed monetarist policies, what can the Government do? My immediate request to the Minister is to respond positively and urgently to any requests that he receives for financial help under the Industry Act 1975 from firms large and small in Halifax and Calderdale. The same applies to requests for help from EEC funds. The preservation of existing jobs and the creation of new ones is of paramount importance if Halifax's industry is to survive.
Secondly, I urge the Minister and his right hon. Friend the Secretary of State for Industry to retain Calderdale's assisted area status, which it is due to lose following a Government decision taken as long ago as 1979. The Minister has agreed to meet a delegation from the Calderdale Economic Regeneration Advisory Committee on 25 February and we shall press the case strongly upon him. That committee represents a cross-section of the working life of Halifax—the trade unions, the chamber of commerce, the chamber of trade and councillors. I shall accompany the delegation.
Under the Government's policy of providing help only in the relatively few places where it is most needed, the intermediate assisted areas of today will become the totally depressed areas of tomorrow. Help from central Government and the EEC is essential if individual firms


are to survive or improve and if the environment in Halifax and the surrounding area is to be improved and made to attract new industry. What is the sense in depriving Halifax of funds when the result is to be the further decline of its industry, so that assistance is provided by the Government only when it is too late?
Thirdly, I ask the Minister to press the merits of Calderdale as a site for the computer and electronics training centre for young people. His colleague the Minister for Industry and Information Technology has put Calderdale on his list for consideration. Any new industries of any kind would be welcome in Halifax. They would help to resuscitate the town and the new firms would profit from the enterprise and traditional skills to be found in the town.

Mr. Barry Sheerman: Does my hon. Friend accept that while we would welcome new industry, in the short term the necessity is for the preservation and resuscitation of old industry, much of it good and highly sophisticated, such as the three firms under threat in Huddersfield, Halifax and Batley and Morley? I refer to some of the firms that the Minister should have visited only two weeks ago. He pulled out of that visit at short notice. Does my hon. Friend accept that a new visit by the Department of Trade to look at those companies at the moment under threat, with over 2, 000 jobs at risk, would be beneficial?

Dr. Summerskill: Yes, we need help for both the existing firms and for new firms. We want both to preserve jobs and create them—we must combine the two.
Within the limits of the massive cuts in the rate support grant imposed by the Government, the local authority in Halifax is making every effort to improve the environment, the amenities and the services and to attract new industry to the town.
Fourthly, special help is needed to enable the textile and carpet industries in Halifax to resist unfair competition from developed industrial countries. I emphasise developed countries because I do not share the view that we should try to resist trade from the poorer developing countries. I hope that the Minister at the Department of Trade will strengthen the milti-fibre arrangement. Will the Department of Industry consider giving some direct financial help to the textile industry?
A scheme has been drawn up and implemented by the Belgian Government to give specific support to the textile industry in that country. Will this Government follow suit before it is too late to save what remains of the textile industry? What consideration have the Government given to similar help to the machine tool industry, at least to sustain it until the recession is over?
I hope that the hon. Gentleman will bear in mind the special difficulties that face Halifax, in particular, and West Yorkshire in general. That area was the cradle of the Industrial Revolution, which has sustained the prosperity of this country, and it is wrong that these traditional industries should be allowed to die. I hope that the hon. Gentleman can answer the specific points tat I made at the end of my speech.

The Under-Secretary of State for Industry (Mr. John MacGregor): As is the custom, I congratulate the

hon. Member for Halifax (Dr. Summerskill) on securing the Adjournment debate and raising two topical matters at the outset of her speech, when she spoke about Carpets International Ltd. and the increase in unemployment in Halifax and Calderdale generally.
The hon. Lady mentioned a wide range of issues, and I hope that I shall succeed in covering a number of them tonight. However, as she said, she is leading a deputation from Calderdale to see me shortly. That places me in some difficulty, because clearly I want to hear representations from the deputation. Therefore, if I do not cover all the matters that she has raised this evening, I shall certainly do so on that occasion.
Less than a year ago, the hon. Lady obtained an Adjournment debate to seek the continuance of assisted area status for Calderdale—a matter that she raised again tonight. She will recall that on that occasion she and I had to stay up all night, and eventually we reached the debate in the middle of the afternoon. On this occasion the House has been more generous to us. On that occasion we went over the general principles relating to assisted area status, so I am sure that she does not want me to go over them again, as they are on the record.
I have agreed to receive a deputation from the metropolitan borough of Calderdale. As she knows, the meeting was first arranged for 21 December, but unfortunately the weather at that time made it impossible, so I agreed to a new date in January. By then, travelling was again uncertain—this time due to the regrettable withdrawal of labour by ASLEF. So we fixed a date later this month on Thursday 25 February.
I know, too, that my hon. Friend the Member for Brighouse and Spenborough (Mr. Waller), and expecially my hon. Friend the Member for Sowerby (Mr. Thompson), who is here this evening, although there are difficulties for him as a Government Whip, wish to be associated with the deputation.
First, I shall make some general points. As the hon. Lady said, the Government are continuing with their regional industrial policy of concentrating on the areas of greatest need. I do not wish to minimise the unemployment problems in her constituency, but there are areas where regrettably, unemployment is persistently high and where, many more thousands of people are without jobs than in the areas that she mentioned. In concentrating on the areas of greatest need and in discussing unemployment we are acutely aware of the difficulties which the world recession has brouht to the whole country. However, when it comes to regional industrial policy, I am sure that we are right to concentrate on the areas of greatest need.
The hon. Lady said that we were concentrating on relatively few assisted areas. I must tell her that, even under the changes announced in July 1979, which will come into operation finally in August of this year, as the transitional period comes to an end 26 per cent. of the country will still be covered by assisted area status. Therefore, it can hardly be said that we are concentrating on relatively few areas. She urged the Government to consider retaining the existing area status for Calderdale and Halifax. We shall discuss this matter in considerable detail with the deputation, and I do not want to pre-empt our discussion on that occasion.
However, I shall mention one or two of the factors which will be relevant in our consideration of the matter. The first is the point that I have already mentioned about


concentrating on the areas of greatest need. There has been a regrettable rise in unemployment, which the hon. Lady mentioned in her opening remarks. Let us look at the levels as a whole. In Halifax, in January this year, unemployment was 11.9 per cent. That compares with the rate for West Yorkshire as a whole of 12.7 per cent., and in Great Britain a rate of 12.5 per cent. I have the unemployment figures for 13 of the travel-to-work areas in Yorkshire, Lancashire and Humberside, all of which are due to lose their assisted area status in August next. Of those 13, 11 have higher unemployment than Halifax. Clearly we have to take that fact into account in considering the hon. Lady's request.
I have concentrated so far on the level of unemployment, but the hon. Lady will know from our previous debates that other factors apart from unemployment must be taken into account in considering individual claims for assisted area status. Those factors are listed in the Industry Act 1972. We have to bear in mind whether the decline in unemployment is persistent and likely to last for a long time, as well as other factors such as geographical location and the opportunity for other jobs. All those factors have to be taken into consideration. However, I have no doubt that we shall discuss this matter at length when she brings the deputation to see me.

Mr. K. J. Woolmer: Is the Minister aware that in West Yorkshire, where textile towns have been badly hit, his words will seem extremely complacent? In Batley unemployment among males and youths is as high as 28 per cent. Belgium and France are introducing schemes to help the textile industry. Why does not the Department of Industry consider the problems of the textile areas as seriously and vigorously as our Continental partners appear to do?

Mr. MacGregor: There is certainly no sense of complacency in what I am saying. I was referring to the problems of Halifax—the subject of the Adjournment debate—and not to the other areas in West Yorkshire. Our policy concentrates aid on the areas of greatest need, and we must take into account the fact that unemployment in Halifax is less that the national average.
It is relevant to point out that some £3, 345, 000 of aid has been either offered to or accepted by firms in Halifax since May 1979, and that has assisted a considerable number of projects in the town.
The hon. Member for Batley and Morley (Mr. Woolmer) referred to the problems of the textile industry. Like others, that industry is being forced to adapt to present conditions in order to regain competitiveness. Where the Government can, they are helping considerably. In that context, the multi-fibre arrangement negotiations are crucial. The hon. Member for halifax also referred to unfair competition from developed countries. She put the emphasis on unfair competition. She will know that when there is evidence of anti-dumping we are prepared to act. I shall refer later to the problem of State aid in other European member countries.
The protocol extending the multi-fibre arrangement—adopted in Geneva on 22 December after long and often acrimonious negotiations—provides for all the United Kingdom's major objectives. Because the multi-fibre arrangement is solely a framework agreement, the practical details will have to be settled in the bilateral negotiations this year with each supplier country. The

Community has stated that if it is unable to negotiate satisfactory bilateral agreements by the end of this year it will withdraw from the multi-fibre arrangement. The United Kingdom insists that this link must be maintained and has made it clear that it will be unable to agree to Community participation in the renewed multi-fibre arrangement unless satisfactory global ceilings are agreed to cover imports from all low-cost suppliers.
In those bilaterial discussions the United Kingdom Government will continue to seek a regime that is tougher and more effective than the present arrangement. That is a clear indication of the type of assistance that the Government are giving to the textile industry.
The Minister of State for Industry and Information Technology will be meeting the Confederation of British Wool Textiles next month when the Werner report on the industry's competitiveness will be discussed.
The hon. Lady also raised the question of other European countries' State aids for the textile and clothing industries. We are aware of those schemes and have urged the European Commission to apply vigorously the relevant treaty provisions. At the same time, the House should know that the textile and clothing industry receives a considerable amount of aid from the Government. In 1980-81 that aid totalled over £80 million and in 1981–82 a further £41 million has been offered or paid so far. Those are not inconsiderable sums.
The Government fully appreciate the problems that face the carpet industry, but, as my right hon. Friend the Prime Minister made clear in a recent exchange in the House with the hon. Lady, rationalisation schemes designed to improve competitiveness are matters for the industry. understand that the levelling of demand and, indeed, the rapid expansion of capacity in the early 1970s, brought about a substantial excess of manufacturing capacity., which by 1977 was already causing the industry some problems. It is fair to say that no agreement on any rationalisation scheme has yet been reached within the industry. However, if it were, the Government would be prepared to consider whether any of the forms of financial aid already available are appropriate to assist such rationalisation.
The hon. Member for Halifax referred particu1arly to Carpets International Ltd. She will know that the sad closure decision that has been announced is a commercial decision by the company. The company as a whole made trading losses of £6.4 million in 1980 and £2.24 million in the first half of 1981. She asked me whether the Department was prepared to consider quickly any applications made for financial aid under existing schemes, such as selective financial assistance under the Industry Act. Yesterday representatives from the management and trade unions at Carpets International held discussions with the Department of Industry's regional office. Officials have fully explained the aid available under section 7. It would be for the company to approach the Department with any proposals for a project for assistance.
The hon. Member referred to the need to improve the environment in the Halifax area. The derelict land clearance status that her constituency will still have after August 1982 is of great importance. As she will know, changes have been announced in the way in which derelict land grants will be paid. My right hon. Friend the Secretary of State for the Environment will allocate derelict land grants in the corning year directly, and on the


basis of need. He will consider sympathetically applications for obsolete buildings. I am well aware that there are problems about obsolete buildings in the hon. Lady's constituency.
The hon. Member for Halifax will know that the Department of the Environment sent a letter on 22 December to all local authorities. I hope that the metropolitan borough of Calderdale has studied the letter and will respond positively to it. I was asked what the Government would do to attract new industry to the area. The role that small firms can play is important. Indeed, I know that that is important in the hon. Lady's constituency. The written representation that I received from Calderdale prior to the deputation stressed that 93 per cent. of the 1, 500 local firms employ fewer than 100 people. That is an important element in the regeneration of our economic base, as some of our more traditional industries, such as textiles and engineering, have declined.

Mr. Sheerman: What evidence is there in Halifax and in West Yorkshire that small firms make up for the tremendous losses experienced since the Conservative Party came to office in May 1979? How many new jobs have been created and how many have been lost? May we have the figures?

Mr. MacGregor: Jobs have been lost because for many years Britain's competitiveness has declined and we have had to deal with the fundamental reasons for that industrial and economic decline during a world recession. Not only in West Yorkshire but throughout the country many painful adjustments have had to be made. I should not expect the expansion of small firms on which we have embarked to have an immediate and dramatic impact. However, in constituencies such as Halifax, where there

has been a heavy dependence on traditional industries, a strong base of small firms will increasingly help to provide that restructuring.

Mr. Sheerman: First-class firms are going out of business.

Mr. MacGregor: The hon. Member for Halifax initiated the debate, and I am trying to concentrate on the problems of Halifax.
The hon. Lady will know that the Government have taken many steps to try to assist in the expansion of small businesses. That will prove increasingly relevant as the recession clears. Some of the points raised by the hon. Lady relate specifically to the deputation that is to see me. One point relates to the small workshop allowance. The 100 per cent. industrial buildings allowance which was introduced in the Finance Act 1980 is clearly leading to a considerable increase in the number of small premises available.
The Government are aware of the representations that have been made about the small workshops allowance and the possible difficulties that relate to some of the definitions applicable to it. That is being considered at the moment. There was an Adjournment debate on the subject not long ago to which my hon. Friend the Financial Secretary to the Treasury replied. That question is being considered at the moment in relation not only to requests being made to us but to the Green Paper on the future of corporation tax.
Time prevents me from going into some of the other points raised by the hon. Lady, but I assure her that I shall do that when she comes with the deputation to see me. I look forward to having discussions with it shortly.

Question put and agreed to.

Adjourned accordingly at half-past Twelve o'clock.